Moody’s Investor Services has upgraded the city of Spokane Valley’s bond rating to Aa3.
“The upgrade … reflects the city's low debt burden, sizeable tax base which is expected to expand into the medium-term, and healthy financial performance, which is maintained through strong management practices,” Moody’s said in announcing the April 9 upgrade while also praising the Valley’s healthy financial reserves.
The Aa3 category is used by the rating company to reflect general obligation bonds it considers “high quality” with “very low credit risk.”
Moody’s noted that the city’s rating could continue to climb if its tax base keeps growing and if its structurally balanced operations are maintained. Conversely, the rating could slip if the tax base deteriorates or if the city’s financial reserves significantly shrink.
The upgraded rating affects about $7.4 million in existing debt from the city's last bond issue, which was in 2003.
As a newer city, the Valley’s previous bond rating was A1, which Moody’s uses to reflect “upper-medium grade” investments. The company rates risk based on a scale ranging from its top rating of Aaa to C at the lowest level.