Lakewood, WA GO Rating Raised To #AA# On Improved Economy And Budgetary Performance

Stocks and Financial Services Press Releases Wednesday June 13, 2018 09:28
SAN FRANCISCO--13 Jun--S&P Global Ratings

SAN FRANCISCO (S&P Global Ratings) June 12, 2018--S&P Global Ratings raised its long-term rating to 'AA' from 'AA-' on Lakewood, Wash.'s outstanding limited-tax general obligation (GO) bonds. The outlook is stable.

"The rating change is based on our view of the city's improved economy and budgetary performance," said S&P Global Ratings credit analyst Benjamin Geare.
The GO rating reflects our view of the following credit characteristics of the city:
  • Strong economy, with access to a broad and diverse metropolitan statistical area;
  • Strong management, with good financial policies and practices under our Financial Management Assessment methodology;
  • Strong budgetary performance, with recent operating surpluses in the general fund and at the total governmental fund level;
  • Very strong budgetary flexibility, based on an available fund balance as a percentage of operating expenditures;
  • Very strong liquidity, and access to external liquidity we consider strong;
  • Very strong debt and contingent liability profile, as well as low overall net debt and rapid amortization; and
  • Adequate institutional framework score.

The stable outlook reflects our opinion of the city's stable, if somewhat limited, local economy as well as our expectation that the city will maintain very strong fund balances and balanced to positive general fund operations until the city makes the final payment on the bonds in 2018. We do not anticipate changing the rating in the next year.

We could raise the rating if the city experiences a significant increase in income and wealth metrics to levels comparable with those of peers.

While unlikely, given that we expect to withdraw our rating when the bonds mature at the end of 2018, we could lower the rating should economic conditions deteriorate dramatically--resulting in a significant deterioration in available reserves.

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