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The Sleepy Eye Herald Dispatch - Sleepy Eye, MN
  • SE GO bond rating raised to ‘AA’ on new local criteria

  • Standard & Poor’s Ratings Services said recently that it raised its rating on Sleepy Eye’s previously rated general obligation (GO) bonds to ‘AA-’ from ‘A+’, based on our recently released local GO criteria.
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  • Standard & Poor’s Ratings Services said recently that it raised its rating on Sleepy Eye’s previously rated general obligation (GO) bonds to ‘AA-’ from ‘A+’, based on our recently released local GO criteria.
     
    At the same time, Standard & Poor’s assigned its ‘AA-’ long-term rating to the city’s series 2013A GO refunding bonds and affirmed its ‘AA+’ enhanced rating on the city’s outstanding debt issued through the Minnesota city credit enhancement program. The outlook on all the ratings is stable.
     
    The ‘AA+’ rating reflects our view of the city’s participation in the Minnesota City Credit Enhancement Program, which provides the security of a standing appropriation from Minnesota’s general fund in the event of a city debt payment default.
     
    A pledge of the city’s full faith credit and resources and an agreement to levy ad valorem property taxes without limitation as to rate or amount secures the series 2013A bonds. However, the city intends to pay debt service from special assessments against benefited properties. City officials intend to use bond proceeds to current refund certain maturities of the city’s series 2005A GO crossover refunding and improvement bonds and its series 2008A GO equipment certificates of indebtedness for interest cost savings.
     
    “The ‘AA’ rating reflects Sleepy Eye’s very strong budgetary flexibility, budgetary performance, and liquidity,” said Standard & Poor’s credit analyst Katilyn Pulcher. Other factors include the city’s:
     
    • Strong management with good financial policies and practices;
    • Very weak economy, which is not tied into any major metropolitan statistical areas; and
    • Very weak debt and contingent liabilities position, mostly reflecting the city’s high net direct debt.
    • The stable outlook on the ‘AA+’ rating reflects Standard & Poor’s view of the rating outlook on the state of Minnesota.
     
    “We do not expect to revise the ‘AA-’ rating in the next two years because we believe Sleepy Eye will maintain a very strong financial profile and liquidity position, in spite of its very weak economy and debt profile,” added Pulcher.
     
    The strong management team adds stability to the rating.
    Complete ratings information is available to subscribers of RatingsDirect at www.globalcreditportal.com and at www.spcapitaliq.com. All ratings affected by this rating action can be found on Standard & Poor’s public website at www.standardandpoors.com. Use the Ratings search box located in the left column.
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