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WHAT DOES YELM’S “A” BOND RATING MEAN?

The general meaning of S & P’s investment grade ratings:

AAAExtremely strong capacity to meet financial commitments. Highest Rating.
AAVery strong capacity to meet financial commitments.
AStrong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances.
BBBAdequate capacity to meet financial commitments, but more subject to adverse economic conditions.
BBB-Considered lowest investment grade by market participants.
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Mayor Ron Harding said at the State of the City Address last month that the city is financially doing “fantastic”. This was followed by the City of Yelm’s “A” financial rating from Standard & Poor’s (S & P) on February 20th. While an “A” rating is investment grade for the city’s library bonds, this rating is in the middle of investment grades and not in the upper tier of graded investments.

The S & P rating cautions that while Yelm has “strong capacity to meet financial commitments” the city is “somewhat susceptible to adverse economic conditions and changes in circumstances.”

By comparison, Standard and Poor’s lowered the United States of America’s long-term rating last summer to “‘AA+’ due to political risks and rising debt burden; Outlook Negative.”
The USA’s AA+ rating is much higher than Yelm’s A financial rating,
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Posted by Steve on March 2, 2012 at 12:19 am | Permalink

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