Standard & Poor upgraded Philadelphia’s credit rating to A+ on Wednesday, the highest rating for the city in decades, officials said.
The new rating, with a long-term Stable outlook, is the second ratings upgrade during Mayor Cherelle Parker’s administration. It follows the upgrade from Fitch in June, officials said. S&P said the improvement recognized the city’s “demonstrated long-term commitment” to fiscal responsibility, and “annual additional payments towards its pensions and rebuilding its budget stabilization reserve (BSR) despite economic and fund balance fluctuations.” The credit rating agency also said the city’s role as the economic anchor for the region.
“This upgrade is the product of the hard, sustained work of every member of our city’s finance and budget teams, under the leadership of Finance Director Rob Dubow,” Parker said. “It’s also the result of our improving Pension Fund, which is 62.2 percent funded, its highest level in two decades. Our economy is diverse and improving – another positive indicator. Higher credit ratings mean lower interest costs when Philadelphia borrows money for city projects, a savings for taxpayers.”
S&P said the city could see further upgrades if it can maintain its combined reserve balances and continue its long-term trend of sustained progress on pension funding. However, the agency did say that the city’s relative weakness in socioeconomic metrics compared to peer cities was a concern.
Philadelphia has been rated in the A category by all three rating agencies since 2013, but the S&P upgrade means the city has its highest combination of ratings in more than four decades. Moody’s upgraded the city’s rating from A2 to A1 in April of 2023, while Fitch upgraded the city’s rating from A to A+ in June 2024.