Reading gets credit upgrade that could help with access to capital

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The credit upgrade will reduce the city’s borrowing costs as well as ensure greater access to capital for growth and development in the Reading area, according to Reading Mayor Vaughn Spencer’s administration.

Moody’s Investors Service, one of the top three credit rating agencies, has upgraded Reading’s long-term debt to Baa1, from Baa2. Moody’s provides international financial research on bonds issued by commercial and government entities.

“This upgrade illustrates Wall Street investors’ confidence in our ability to stabilize the city’s financial health,” Spencer said.

Moody’s ranks the creditworthiness of borrowers using a standardized ratings scale which measures expected investor loss in the event of default. In the company’s ratings system, securities are assigned a rating from Aaa to C, with Aaa being the highest quality and C the lowest quality.

“Since entering into the Act 47 distressed cities program, the city’s finances have stabilized, resulting in a return to structural balance and growing reserve levels, with an operating surplus expected in fiscal 2014,” Moody’s was noted as saying in the city’s press release. “While the city is still faced with challenges … the city’s improved flexibility helps to mitigate these risks.”

City officials said Reading is focused on the revitalization and redevelopment of blighted properties, as well as zoning and land development restrictions to help encourage new development.