City of North St. Paul Bond Rating
S&P Global Ratings
The City of North St. Paul has been assigned an “AA” Stable from S&P Global Ratings. The City has carried the “AA” rating since May of 2014 and was most recently affirmed in May 2020. The May 2020 rating affirmation reflects the assessment of the City’s following factors:
- Strong economy, with access to a broad and diverse metropolitan statistical area (MSA);
- Strong financial management, with good financial policies and practices under our Financial Management Assessment (FMA) methodology;
- Adequate budgetary performance, with operating results we expect could deteriorate in the near term relative to fiscal 2019, which closed with operating surpluses in the general fund and at the total governmental-fund level;
- Very strong budgetary flexibility, with available fund balance in fiscal 2019 at 30% of operating expenditures;
- Very strong liquidity, with total government available cash at 2.7x total governmental-fund expenditures and 15.9x governmental debt service, and access to external liquidity we consider strong;
- Weak debt-and-contingent-liability position, with debt service carrying charges at 17% of expenditures and net direct debt that is 218.4% of total governmental-fund revenue, but rapid amortization, with 70.8% of debt scheduled to be retired within 10 years; and
- Strong institutional framework score. The bond rating helps to ensure that future debt will be issued with the lowest possible interest expense and cost to the taxpayer. The rating also provides opportunities to refinance outstanding debt at lower interest rates.
Moody's Investor Services
On November 19, 2020 Moody’s Investor Services assigned an initial Aa3 Issuer Rating to the City of North St. Paul. The issuer rating represents Moody's assessment of hypothetical debt of the city supported by a general obligation unlimited tax (GOULT) pledge and is used as a reference rating for the city's electric enterprise revenue rating. Moody’s does not currently rate any of the city's outstanding debt supported by a GOULT pledge.
On November 19, 2020 Moody’s Investor Services upgraded the City of North St. Paul, MN's electric revenue rating to A2 from A3. The A2 rating applies to about $750,000 of senior lien electric revenue debt. The upgrade to A2 reflects materially improved liquidity and debt service coverage following recent rate increases and reduced support provided by the system to other city funds. The electric enterprise benefits from a stable customer base and unlimited local rate setting authority. The system has some exposure to generation risks as a member of the Minnesota Municipal Power Agency (MMPA; A1 stable).