Citywide News

Posted on: February 1, 2017

Moody's upgrades City of Taylor bond ratings

moodys logo.jpg

Moody's Investors Service on January 30 upgraded to Baa2 from Baa3 the City of Taylor's General Obligation Limited Tax (GOLT) bonds and bond issued by the Taylor Building Authority impacting $5.2 million of rated debt. 

The City's bond ratings have improved consistently over the past three years, according to both Moody's and Fitch Ratings. In 2014, the City's bond ratings hovered in the "junk bond" status due to budgetary problems. At that time, Taylor was operating in a state-mandated Deficit Elimination Plan. But the City's finances have now rebounded from a $5M deficit to a $5.4M unassigned budget balance.

The upgrade to Baa2 will bring the GOLT rating to the same level as Moody's internal assessment of the city's hypothetical GOULT, given the presence of a full faith and credit pledge. The rating action concludes a review undertaken with the publication on December 19, 2016 of the US Local Government General Obligation Debt Methodology.

The Baa2 rating incorporates the city's significantly improved liquidity position that reduces near term operating risks while recognizing substantial challenges ahead given high fixed costs, growing long-term liabilities and relatively weak economic profile.

The Baa2 rating also applies to bonds issued by the Building Authority given rental payments are backed by a GOLT full faith and credit pledge via an unconditional lease agreement.

Rating Outlook

The stable outlook reflects the expectation that the city's liquidity position will likely remain adequate given substantial recent expenditure reductions.

Factors that Could Lead to an Upgrade

  • Moderation of pension and OPEB liabilities
  • Recovery of the tax base and economic profile

Factors that Could Lead to a Downgrade

  • Decline in reserves or liquidity
  • Increase in the city's debt burden, unfunded pension liabilities or OPEB liabilities
  • Legal Security

Taylor's GOLT bonds are a first budget obligation and secured by its pledge and authority to levy property taxes within statutory and constitutional limitations to pay debt service.

Bonds issued by the City of Taylor Building Authority are secured by lease payments made to the Authority by the city. The lease payments are secured by the city's full faith and credit pledge, equivalent to its pledge on GOLT bonds, and are not subject to appropriation.


Profile

Located 15 miles southwest of Detroit (B2 stable) in Wayne County (Ba2 positive), the City of Taylor is near the Detroit Metropolitan Airport. The city encompasses approximately 24 square miles. The city's population has declined in recent decades, and the 2010 Census population of 63,131 reflects a 4.2 percent decline from 2000. The population is estimated to have subsequently declined another 2 percent to 61,568.

Methodology

The principal methodology used in these ratings was US Local Government General Obligation Debt published in December 2016. The additional methodology used in the lease revenue general obligation limited tax rating was Lease, Appropriation, Moral Obligation and Comparable Debt of US State and Local Government published in July 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies.

Regulatory Disclosures

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.



Facebook Twitter Google Plus Email

Other News in Citywide News

2017 Amnesty Program

Posted on: March 24, 2017
Thomas Bonner.jpg

Former police chief to be laid to rest

Posted on: February 24, 2017
new website 1.jpg

City rolls out new website

Posted on: January 23, 2017
drugs.jpg

Townhall meeting to focus on drug use

Posted on: January 23, 2017

No charges filed in shooting of dog

Posted on: January 8, 2017

Snow emergency declared on December 16

Posted on: December 20, 2016

Recreation center offers The New Fit U

Posted on: December 20, 2016

Snow emergency declared December 11

Posted on: December 20, 2016

DPW trucks are ready for first snow fall

Posted on: December 20, 2016

Podcast discusses important holiday events

Posted on: December 20, 2016

DPW makes note of important dates

Posted on: December 20, 2016

True Meaning of Christmas Dinner scheduled

Posted on: December 20, 2016

Eureka Road renovations are complete

Posted on: December 20, 2016
winter festival route 2.png

Get ready for Taylor Winter Festival

Posted on: December 20, 2016

Eureka roadwork begin Allen and Racho ends

Posted on: December 20, 2016

Major road repairs expected near school

Posted on: December 19, 2016

$95,000 grant to improve Heritage Park

Posted on: December 19, 2016

Hayes-Pine intersection to be closed

Posted on: December 19, 2016

School superintendent discusses millages

Posted on: December 19, 2016

Work on Mortenview is delayed

Posted on: December 19, 2016

Operation Gratitude ongoing at Lee Dental

Posted on: December 19, 2016

VP nominee to speak in Taylor

Posted on: December 19, 2016

Construction to begin on Mortenview

Posted on: December 19, 2016

Podcast, TV show discuss lawsuit

Posted on: December 19, 2016

Road work to continue throughout fall

Posted on: October 24, 2016

Testing could cause water discoloration

Posted on: October 24, 2016
Howard Noble artists rendering web.png

Howard Noble Park to get new playscape

Posted on: October 24, 2016

Election inspectors are needed

Posted on: October 24, 2016

Beech Daly construction continues

Posted on: October 24, 2016

Clerk's office offers expanded hours

Posted on: October 24, 2016

The Jungle Book in scheduled Friday

Posted on: October 24, 2016

Work to begin on Lorne Street

Posted on: October 24, 2016
lazyboy web 1.jpg

La-Z-Boy joins Eureka Way!

Posted on: October 24, 2016

Fire could cause water problems

Posted on: October 24, 2016

DTE Kiosk Network available to residents

Posted on: October 24, 2016
keith boc.jpg

Keith Boc named DPS director

Posted on: October 24, 2016

Work begins on Empire Street

Posted on: October 24, 2016

Public hearing on water main project

Posted on: October 24, 2016

Water main work is planned

Posted on: October 24, 2016
meadows work 2 web.JPG

Taylor Meadows renovation is under way

Posted on: October 24, 2016

Rain hampers JLWS final weekend

Posted on: October 24, 2016