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Growing Pains: Eminent Domain Pitting City Against Small Business Owner
Low Enrollment a Challenge at Compton Education Center
Council Approves Multi-million Dollar Bond Issue to Fund Public Projects
Compton Water Officials Say Tap Water’s OK
Dominguez High Football Star, USC Recruit Arrested for Robbery
Earl
Ofari Hutchinson:
Black Voters Alone Won’t Put Obama in the White House
City’s
Credit Rating Bumped Up a Notch
Standard and
Poor’s moves city from BBB+ to A- as Compton prepares to issue
nearly $50 million in lease revenue bonds
By
Allison Jean Eaton
Bulletin Staff Writer
COMPTON – The
city’s financial situation received a boost last week when one
of the world’s leading financial research and analysis firms
raised Compton’s credit rating.
The city received word Tuesday, March 11 that Standard and Poor’s
has given it an A- long-term credit rating, said City Manager Charles
Evans. Previously, the city had been rated as a medium-class borrower
at BBB+.
Evans said the news was unexpected.
“We were just hoping for the same rating,” he said. “This
puts us up there with those top-rated cities like Culver City.”
The bump up puts Compton in an even stronger position when it next
month issues and sells nearly $50 million in lease revenue bonds, explained
Evans. The city is attempting to secure insurance on the transaction
through an AAA-rated insurer.
The bonds are being sold to fund a handful of public-improvement projects
including the highly anticipated new senior center, a parking structure
at the transit center and the rehabilitation of, and creation of new
office space at, City Hall.
Additionally, a portion of the funds will be used to refund the city’s
outstanding Certificate of Participation bonds issued in 1997.
An A- rating coupled with an AAA-rated insurer will make Compton’s
lease revenue bonds that much more attractive to potential investors
when the bonds are sold on the stock market.
“People are going to gobble up our bonds. You look at our rating
and the bond insurer’s rating, and you can’t lose,” Evans
said.
It also means the city will be able to secure lower interest rates
because it has been deemed less likely to default.
“The rating action was based on Compton’s strong historical
financial performance with above average unreserved general fund balances
since
fiscal year 2005,” wrote Standard and Poor’s in its notification
letter to the city. “The outlook is stable.”
Designated a nationally recognized statistical rating organization
by the U.S. Securities and Exchange Commission, Standard and Poor’s
issues long- and short-term credit ratings for debt of public and private
corporations. It rates borrowers on a scale from AAA to D, with AAA
representing the best quality borrowers and the least risk.
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