News Release News Release The City of Palo Alto
Communications Department
650-329-2607
250 Hamilton Ave
Palo Alto, CA 94301

6/3/2010

FOR IMMEDIATE RELEASE
PRESS RELEASE 06/03/2010
Subject :

Triple A Bond Rating Awarded by S&P and Moody's for Palo Alto Library and Community Center Capital Improvement Bonds
Contact : Lalo Perez, Director, Administrative Services    650-329-2675
Pamela Antil, Assistant City Manager    650-329-2533
Palo Alto, CA – The City is proud to announce that both Standard and Poor's (S &P) and Moody's awarded their highest credit ratings, Triple A, to the General Obligation Bonds for library and community center capital improvements. The first of two series of Bond issues is slated for June 2010 in an amount not to exceed $60 million. The City voters authorized a maximum issuance amount of $76 million.

S & P cited the following factors in conferring the Triple A rating:
  • Diverse and mature economic base
  • High wealth and income levels and very high home values
  • Continued very strong financial operations and policies; and
  • Manageable overall debt levels

"We are extremely pleased that both S&P and Moody’s have confirmed that our capital improvement bonds are of the highest creditworthiness," said Assistant City Manager Pamela Antil. "This means we can obtain construction funds for our new Mitchell Park Library and Community Center at a lower cost to the community." Construction on the facility, the first major building project in over 30 years, will begin later this summer.

Other elements considered by S & P in their analysis included: "proximity to Stanford University which has provided the foundation for high technology research and professional services firms…"; the Stanford Shopping center which anchors a vibrant retail environment; a relatively low unemployment rate in the City; strong General Fund reserves; and proactive actions to balance anticipated budget gaps caused by declining revenues. In addition to the AAA rating, S & P stated that the outlook for this rating is “stable.”

Moody’s analysis confirms the City’s strengths and echoes S & P’s findings. Moody’s states that its triple A ratings “reflect the city’s economic strength, resulting from its location in the heart of the Silicon Valley and the presence of Stanford University, combined with its high wealth and income levels, strong financial management, above average degree of financial flexibility, and low debt levels.”

The above ratings are critical in selling the City’s General Obligation bonds approved by the voters through Measure N and in achieving the lowest possible interest costs for property owners. In an environment of tight credit, revenue declines, and general economic upheaval, the community and Council can take pride in realizing these excellent, Triple A ratings.

Review these ratings in more detail:




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