City of Portage Maintains ‘AA+’ Bond Rating for Fourth Consecutive Year
On May 12, 2021, S&P Global Ratings assigned the ‘AA+’ rating to the City of Portage for the fourth consecutive year. The ‘AA+’ rating is the second-highest that can be assigned to a municipality. The rating was assigned to the city’s $13.685 million 2021 Capital Improvement Bonds, which will fund several projects throughout the city. The largest project is the construction of the Charles and Lynn Zhang Portage Community Senior Center. Other projects include several major street reconstruction projects, traffic signal and fiber network upgrades, park improvements and development, trailway improvements, technology improvements, and public facility and infrastructure improvements.
S&P Global commented, “The local economy remained resilient through the COVID-19 pandemic and continues to see growth due to ongoing expansion of its top and large employers as well as residential development, with further growth expected. This boosts revenue, resulting in ongoing positive financial operations, and very strong budgetary flexibility that will keep supporting the city's plans to fund an array of capital projects. The city's very strong management practices further highlight its proactive nature in ensuring stability across its financial operations.”
“In Portage, we take a proactive, year-round approach to successfully position the city as it relates to our bond rating,” said Portage City Manager, Joseph La Margo. “Portage taxpayers deserve the best return on their investment and the city’s ‘AA+’ bond rating is the primary factor affecting the interest costs on bonds issued by the city.”
Playing a role in S&P’s economic assessment of the city was recent major investments from Stryker Instruments, Pfizer, and FedEx. These new expansions continue to grow the local tax base and create new jobs. When the commercial and industrial growth is combined with residential development, the city's total market value rose 8% to $5.4 billion.
City municipal financial advisor Steven Burke, CFA, President of MFCI, LLC, said, “The City of Portage is an excellent credit. By maintaining the ‘AA+’ rating, the city’s new bonds continued to generate strong demand from investors and delivered low borrowing cost to the city and its taxpayers.” The city received seven bids at the May 20, 2021, competitive bond sale. The low, winning bid had a true interest cost of 1.805%.