Cambridge One of Only 22 Cities to Earn Highest Credit Rating Possible from Rating Agencies

The City of Cambridge is one of only 22 cities in the United States to earn the highest credit rating possible from Moody’s Investors Service, S&P Global Ratings, and Fitch Ratings.  The City has achieved this distinction of earning AAA ratings from each of the nation’s three major credit rating agencies every year since 1999.

In determining the City’s credit rating, the rating agencies consider criteria related to the City’s management, the strength of the local economy, the city’s financial condition and reserves, and debt burden.  

The rating agencies highlighted the City’s strong management and fiscal practices, financial flexibility, formal policies, budgetary stability, and healthy reserves.

"I am incredibly proud that we are one of the only cities in the country to be awarded three AAA ratings," said Cambridge City Manager Yi-An Huang. "This distinction is noteworthy when you consider Cambridge has held it every year for 26 consecutive years – particularly given the current economic challenges. As we look forward, we are entering a time of lower growth, flat valuations, and tremendous uncertainty in federal funding. It is more imperative that we maintain and follow strong fiscal policies and practices, while ensuring we plan more carefully and prudently in order to sustain fiscal health and stability. These practices will enable the City to prioritize major projects and support the most significant needs within our community, including our most vulnerable residents.”

Highlights from the rating agencies:

Moody’s Investors Services
“The City benefits from a strong economy that is anchored by world renowned higher education institutions and a substantial research and development sector. The stable outlook reflects the city’s strong fiscal management and governance that is committed to maintaining a healthy financial position based on conservative budget forecasting and formal policies.”

S&P Global Ratings
“Its management team operates with established and well-embedded policies and procedures, with a focus on forward-looking planning that allows for key city priorities to be addressed while sustaining financial stability and flexibility.  The city also maintains and adheres to robust policies pertaining to investments, debt management, and reserves.”

Fitch Ratings
The 'AAA' rating reflects Fitch's expectation for “the City to maintain healthy financial flexibility through future economic cycles, consistent with its history of strong operating performance and robust reserves.”

The ratings were in conjunction with the City’s sale of over $165 million in General Obligation bonds in early March.  Because of the City’s excellent ratings, the bonds were sold at a True Interest Cost of 2.96%.  The favorable credit ratings that the City has consistently received play a direct role in limiting the burden placed on taxpayers in the community, while providing and maintaining the ability to make major investments in key initiatives and community priorities.

Capital projects funded through this bond issuance include Tobin and Vassal Lane Upper Schools construction, open space and path projects, Fire Station headquarters, Harvard Square Kiosk and surface improvements, Central Square reconstruction, municipal facilities, school building repairs, street and sidewalk reconstruction, and sewer reconstruction. All of these projects reflect essential investments for the future and reflect City Council and community priorities.

The Moody's, S&P's, and Fitch credit reports are available on the City’s website.