2 Baltimore bond issues draw favorable ratings

June 15, 1993|By William F. Zorzi Jr. | William F. Zorzi Jr.,Staff Writer

Praising Baltimore's handling of the its finances during the recession and recent cuts in state aid, two of the nation's key rating agencies assigned A and A-1 ratings yesterday to more than $48 million in general obligation debt the city plans to sell today.

Baltimore is scheduled to sell $37.46 million in tax-exempt general obligation bonds for public improvements and $11.18 HTC million in taxable general obligation bonds for projects related to economic development.

The bond ratings came a week after Mayor Kurt L. Schmoke and city finance officials met in New York with the ratings agencies for the city's annual financial review.

Standard & Poor's Corp. and Moody's Investors Service affirmed their ratings of the city's existing debt.

"It's a reflection by the ratings agencies of the administration's ability to manage its financial resources well in a difficulty economic environment," said William R. Brown Jr., the city's finance director.

Standard & Poor's, which gave the city's two issues an A rating, among its highest, also revised its ratings outlook upward to "positive" from "stable," citing "conservative financial and debt management practices," according to a statement.

"The positive outlook reflects S&P's expectation that Baltimore -- having maintained a sound financial position throughout the recession -- will be well-positioned to benefit from the positive impact the economic recovery is to ultimately have on the city's revenue base," the statement said.

City officials were encouraged that the upward revision could be an indication that S&P is considering upgrading the city's rating to A+ from A, a notion bolstered by an S&P suggestion in its statement.

"An upward revision in the rating is contingent upon continued strong financial management and maintenance of a sound financial position as Baltimore emerges from the recession," the statement said.

Moody's gave the city bonds an A-1 rating, among its highest, citing handling of the economic downturn.

"Above-average credit quality is supported largely by conservative budgeting practices and strong state support for a number of costlier budgetary operating items, a diverse economic base and a moderate debt position," Moody's stated.

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