The village of Bolingbrook announced this week that Standard & Poors Global Ratings raised its credit rating by three levels to A2.
Moody’s assigned the village a AA rating in 2018, an upper medium grade to an A2 rating, a high grade, which represents a significant improvement, according to a news release.
The upgrade to the village’s series of general obligation refunding bonds was based on S&P’s determination that the village has:
• Strong management with the ability to maintain consistent balanced operations
• Very strong budgeting performances resulting in operating surpluses which enables the village to exceed its debt-servicing obligations
• Very strong budgetary flexibility allowing it to shift resources as needed
• Very strong internal liquidity with access to external liquidity
• A strong institutional framework score
In reaching its conclusion to increase the Bolingbrook’s credit rating, S&P said that village management had “realistic and well-grounded” assumptions when setting the annual budget, holds to a formal investment-management policy, and adheres to an informal fund-balance target of maintaining a general fund reserve of at least three months’ operating costs, all of which are consistent with rating the AA credit score.
As a result of the increased S&P rating, the village is refunding its 2010 general obligation bonds, which it said in its release is similar to refinancing a home mortgage.
The present value that the village will see is a little more than $3.4 million without extending the term of the bonds’ maturity.
S&P added in its report that Bolingbrook “has a strong economy we expect will likely continue to improve through continued commercial, retail and residential development,” according to the release.
It also cited the expansion of those sectors with multiple local housing developments underway, coupled with an expansion of businesses such as WeatherTech.
The village also has 900 acres of annexed but undeveloped land, allowing room for more growth.
S&P concluded that Bolingbrook’s “budgetary flexibility, budgetary performance and liquidity will likely remain strong.”
In a message to Bolingbrook Mayor Roger Claar, former state Sen. Kirk Dillard said, that the A2 rating was “not an easy designation to get in a state like Illinois with its well-documented fiscal woes.”