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Tuesday, October 18, 2011

Nashua borrowing power is AAA strong

NASHUA – The city has received the highest possible credit score from Fitch Ratings: an “AAA” grade on its general obligation bonds.

Fitch, a globally recognized ratings agency, gave the high mark to Nashua’s $13.5 million in general obligation capital improvement bonds that are scheduled to sell competitively Wednesday. Fitch added that Nashua’s rating outlook is stable.

Several factors determined Nashua’s rating, Fitch said Tuesday. The city’s economy continues to see growth, government has made “appropriate spending cuts” to keep taxes under control and the reserve fund is healthy, Fitch said.

Fitch said the city has a manageable debt burden, although it noted Nashua’s debt level will “increase” if the state allows the purchase of Pennichuck Corp.

Nashua intends to issue $157 million in taxable bonds to finance the acquisition and could issue bonds of up to $220 million. The bonds would be paid with Pennichuck revenue, in large part through water rates that will be set by state regulators.

An explanation of the rating is available at MarketWatch: