Fitch gives Manchester AA+ rating

The Fitch bond rating firm has rated the city of Manchester’s 2007 general obligation bonds “AA+” and its school facility revenue bonds “AA.”

The New York company said that the ratings on the $33 million of general obligation bonds reflected the city’s strong financial management “in robust reserve levels exceeding policy minimums and a growing and diversified economic base with recent, major successful investments in the downtown and riverfront mill areas.”

The slightly lower rating on the city’s $96.5 million of school revenue bonds was attributed to the weaker security of debt service subject to budget and appropriation.

Fitch also rated $177.5 million of Manchester’s outstanding general obligation bonds at “AA+,” affirming previous evaluations.

“The city’s financial management is one of its key credit strengths. The city has a long history of prudent financial and debt management polices, including rapid debt retirement and a rainy day fund policy totaling 5 percent of the budget,” said the bond reviewer in a prepared statement.

“With such policies, the city has maintained a strong financial position … For additional flexibility, the city maintains contingency reserves in its special revenue and policy-mandated rainy day fund.”

While Fitch noted the city’s debt levels have declined and are moderate to low at approximately $2,278 per capita and 2.41 percent of market value, the school and general debt together was above average at 13.3 percent of fiscal 2006 expenditures, up from 10 percent in fiscal 2002.

Fitch said it expects the debt service burden to remain affordable as future capital needs are manageable.

Both the city’s general obligation and school revenue bond outlooks were rated “stable.” — CINDY KIBBE

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