Moody’s Investors Service has assigned a Aaa rating to the Town of Wellesley’s (MA) $52 million General Obligation Municipal Purpose Loan of 2015 Bonds and $14 million General Obligation Taxable Municipal Purpose Loan of 2015 Bonds as well as a MIG 1 rating to $4.1 million General Obligation Bond Anticipation Notes (dated June 15, 2015 and payable December 11, 2015). Concurrently, Moody’s has affirmed the Aaa rating on $86.9 million of outstanding general obligation bonds. The outlook is stable.
The Aaa rating reflects the town’s sizeable and wealthy suburban tax base, well-managed financial position with sound reserve levels and history of voter approved overrides to the tax levy limitations of Proposition 2 ½. The rating also incorporates an above average but manageable debt burden and focus on funding of long-term liabilities.
The MIG 1 rating reflects the town’s strong long-term credit characteristics, ample liquidity and sufficient management of takeout financing given demonstrated history of accessing the short-term market for multiple note and bond sales over the past five years.
The stable outlook reflects the town’s conservative budgeting approach supported by formalized financial policies. The outlook also incorporates the additional financial flexibility provided by voter approved debt exclusions and general overrides to Proposition 2 ½.
– Sizeable and wealthy suburban tax base
– Well-managed financial position with sound reserve levels and strong voter support for property tax increases
– Above average but manageable debt burden
– Rising education costs
WHAT COULD MAKE THE RATING GO DOWN:
– Trend of operating deficits resulting in a material decline in available reserves
– Trend of increasing financial pressure due to unsuccessful votes for tax levy overrides or debt exclusions
– Material increase in the debt burden or pension liability
Also of interest…