Moody’s Investors Service recently upgraded the City of Philadelphia’s credit rating from A2 to A1 with a long-term stable outlook while the S&P Global Ratings maintained the city’s A rating while revising its outlook to positive.
“The recent rating actions are a major accomplishment and a testament to the city’s commitment to our financial health,” City Treasurer Jackie Dunn said. “Our ratings reflect the progress the city has made over time on important issues like rebuilding reserves and improving the health of our pension fund.”
Moody’s based its upgrade on improvement in the city’s fund balance and liquidity has notably improved over the past three years, the city’s ability and willingness to proactively improve the health of its pension fund, and a consistent track record of strong financial management and responsible budget controls.
This is the first time since Moody’s has updated the city’s rating since 2018.
S&P Global Ratings’ revised outlook means there is at least a one-in-three chance of a rating increase in the next two years if the city maintains strong reserves and financial results in line with current estimates.
Credit ratings are used to determine the interest rates cities pay when borrowing funds.
Philadelphia ended fiscal year 2022 with a $779 million audited fund balance.