Calera receives high credit ratingPublished 2:01pm Friday, October 5, 2012
By CHRISTINE BOATWRIGHT / Staff Writer
CALERA – The city of Calera recently received a “really good credit rating” from Standard and Poor’s rating service, which will benefit taxpayers as the city refinances bonds with lower interest rates, said Reid Cavnar, vice president of Merchant Capital.
Calera received an AA-minus rating from S&P, which is a “very good rating for a city,” Cavnar said. “The rates of their bonds will be a little lower than if they had been A or BB.”
According to Cavnar, Merchant Capital, an independent investment banking firm, assisted the city in structuring a presentation and formulating financial policies to present to S&P.
The S&P rating is based on a number of criterions, Cavnar said.
“They want to be sure you have healthy reserves, good management practices, good financial policies in place, which Calera has, and a good tax base,” Cavnar said. “Shelby County is obviously a very good part of the state, so that helps.”
In an email, Cavnar wrote the city has a “stable outlook.”
“This type of rating reflects the good management of the city and a demonstrated track record of fiscal responsibility,” Cavnar wrote. “Many cities the size of Calera are rated in the single A category, so for Calera to get into the double A category is very impressive.”
Calera Finance Manager Roy Hadaway said the city’s general obligation warrants were issued in 2005. Refinancing the bonds will not reduce the length of the payment, but will save taxpayers money by having a lower interest rate, Hadaway said.
“It all comes down to saving money,” Hadaway said.