June 5, 2007

Agencies reaffirm city’s credit rating

All three national rating agencies reaffirmed San Jose’s AA+ credit rating in late May, citing strong financial management and economic development activities. Standard & Poor’s, Moody’s and Fitch all confirmed the city’s rating for General Obligation bonds with a stable outlook. The city continues to sustain the highest bond rating of any large city in California.

The city’s finance department presented an informational overview to the agencies during the fourth week in May.

Standard & Poor’s also assigned San Jose the “Strong” financial management assessment, the highest rating in this new category. In a statement, the rating agency said the city’s financial management “indicating that financial practices are strong, well embedded and likely sustainable.” S&P also noted the city maintains most best practices deemed critical to supporting credit quality and that these are well embedded in the city’s daily operations and practices.

“Achieving AA+ bond ratings is important as we work to address our long term structural budget deficit,” said Mayor Chuck Reed. “These bond ratings affect the rate at which the city can borrow funds for critical needs, resulting in significant savings for our residents. I am pleased that all three of the national credit agencies recognize San Jose’s commitment to prudent fiscal management and developing a strong and sustainable local economy.”

This is the city’s seventh consecutive year with an AA+ rating.