A company called Fitch Ratings says the City of Lubbock has a good credit rating on more than $1 billion of debt, most of which has already been borrowed. The decision will help Lubbock pay lower interest on $400 million or more of future debt, so it's good for taxpayers.
The City is about to borrow $89 million for various projects and Fitch also looked at $945 million of current debt. All of the debt is rated ‘AA+' which is "very high credit quality."
Fitch says, "Overall debt levels are above average." While that is reason for concern, Fitch also says, "the city's sales tax receipts continued to grow despite the recession." The property tax base has also shown slow and steady growth.
"The city's overall debt burden at $2,870 per capita," and Fitch says the city plans to spend $410 million on capital projects between now and 2016, not including Lubbock Power & Light.
This list below is a summary of what Fitch examined. GO bonds, or general obligation bonds, are authorized by the voters. CO's, or certificates of obligation, are authorized by the City Council.
On Thursday KCBD.com quoted Fitch as saying Lubbock had a good credit rating on more than $1 billion of debt. Fitch said Lubbock had outstanding debt of $945 million and on March 21st will borrow $10.9 million, plus $14.7 million, and $63.4 million. The old & new debts would add up to more than $1 billion.
However, Fitch was wrong about Lubbock's outstanding debt. The City has asked Fitch to revise its news release to indicate $909 million of debt. That means Lubbock will still owe less than $1 billion after March 21. This does not change the AA+ credit rating on outstanding debt and the three new debts.
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