Cedar Hills, UT GO Bond Rating Raised To #AA# From #AA-# On Improved Outlook Is Stable

Stocks and Financial Services Press Releases Tuesday March 13, 2018 10:08
SAN FRANCISCO--13 Mar--S&P Global Ratings

SAN FRANCISCO (S&P Global Ratings) March 12, 2018--S&P Global Ratings has raised its long-term rating to 'AA' from 'AA-' on Cedar Hills, Utah's general obligation (GO) bonds outstanding. The outlook is stable.

"The upgrade reflects our view of the improvement in city's economy and in its debt and contingent liability profile," said S&P Global Ratings credit analyst Brian Phuvan.
A pledge of Cedar Hills' full faith credit and resources and an agreement to levy ad valorem property taxes, without limitation as to rate or amount, secure the GO bonds.
The rating reflects our view of the city's:
  • Strong economy;
  • Strong management;
  • Strong budgetary performance;
  • Very strong budgetary flexibility;
  • Very strong liquidity;
  • Adequate debt and contingent liability profile; and
  • Very strong institutional framework score.

The stable outlook reflects our view of Cedar Hills' strong budgetary performance and very strong budgetary flexibility that we believe will continue for the next two years due to higher-than-normal sales tax revenue performance. The stable outlook further reflects our view of the city's access to the broad and diverse Provo-Orem metropolitan statistical area, which will continue to provide additional employment access and moderate local economic fluctuations. We don't expect to change the rating in the two-year outlook period.

We could raise the rating if the city's economic profile and incomes improve to levels that we consider very strong and the city strengthens its policies and practices under our Financial Management Assessment methodology, while maintaining strong budgetary performance and very strong budgetary flexibility.

We could lower the rating if Cedar Hills cannot maintain stable operations, particularly in the event of an economic recession, leading the city's budgetary performance to weaken and it to draw down on available fund balances to levels that we consider no longer comparable with those of similarly rated peers.

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