In a notable financial update, Moody's, one of the big three credit rating agencies, has boosted Denver's dedicated tax bond rating and confirmed the city's Aaa General Obligation Bonds rating the peak score achievable. According to the Denver Department of Finance, this elevation reflects the robust health of the city's economy, governance, and financial operations. Additionally, methodology updates from Moody's also played a part in the rating changes.
Impacting $815.1 million in outstanding dedicated tax debt, this upgrade also mirrors the city's economic resilience shown by about 8% average annual growth rate in dedicated tax revenues over the past decade. Nicole Doheny, Denver’s Chief Financial Officer said, "Denver is pleased our credit ratings continue to benefit taxpayers, through lower and more favorable interest rates," as per the Denver Department of Finance. The ratings not only speak to Denver's financial strength but also to the diligence of the city's financial management team.
The city's bond ratings, essential in informing investors about reliability and assuring low-interest rates on bond repayments, also benefitted from Moody's finding that Denver's sales tax collections comfortably cover maximum annual debt service by over 3.6 times. This is a vital figure indicating the city's ability to repay its debts. Other bond rating agencies earlier this year also conferred Denver with the highest accolades in terms of financial soundness and future outlook.
Despite the housing affordability issues exacerbated by the pandemic's inflated home values in Denver, recent price stabilizations and growth in the local labor market's income levels are seen as positive signs for ongoing economic stability. Moody's notes that although dedicated tax revenues saw significant fluctuations during the pandemic, the trajectory seems set on a slower yet positive growth for fiscal 2024 and 2025. Moreover, the city plans to budget and manage all revenue streams conservatively, amid evolving consumer spending and real estate market trends.
