Bond rating agency upgrades outlook on city's finances

June 07, 2006|By JOHN FRITZE | JOHN FRITZE,SUN REPORTER

A leading bond rating agency has upgraded its outlook of Baltimore's financial position after the city's second straight budget surplus, Mayor Martin O'Malley's office confirmed yesterday.

Standard & Poor's upgraded its outlook to "positive" from "stable," a change that should make borrowing money easier and less expensive for City Hall. The agency also reaffirmed the city's A-plus bond rating.

"Working together with the City Council over the last few years we've had to make some really difficult decisions," said O'Malley spokeswoman Raquel Guillory. "This rating is affirmation that the city's sound financial management is helping Baltimore's economy."

In making its recommendation, Standard & Poor's noted the city's recent economic improvement. This year, the city posted a $61 million surplus - its second surplus in two years - based largely on higher real estate values and resultant property tax receipts.

The company's upgrade came days before the city borrowed $47.5 million in general obligation bonds yesterday for capital projects to renovate recreation centers, parks and community development programs.

Bond ratings, which go up to AAA, affect interest rates and other investment factors.

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