Cambridge Earns Highest Credit Rating Possible from Rating Agencies For the 27th Consecutive Year

The City of Cambridge has once again earned the highest possible credit rating from Moody's Investors Service, S&P Global Ratings, and Fitch Ratings. Cambridge is just one of 27 cities nationwide to earn the highest rating possible from each of the nation's three major credit rating agencies. The City has achieved the distinction of earning AAA rating from all three rating agencies every year since 1999.

The AAA rating reflects the agencies' ongoing confidence in Cambridge's financial management, long-term planning, the City's ability to balance strong public investment with fiscal discipline, and the inherit strength of the local economy.

What the AAA Rating Means for Residents

Achieving this AAA rating from the major credit rating agencies lowers the City's borrowing costs, which in turn saves taxpayer dollars as Cambridge invests in critical infrastructure and core services. It also stands as a clear endorsement of the City's fiscal discipline and role as a leader in sound municipal management.

The City's strong debt management policies and high credit ratings allow Cambridge to borrow at the lowest available interest rates and manage debt responsibly over time.
This reduces the cost of major public investments, including:

• School building improvements and construction
• Public facilities such as fire station headquarters, municipal facilities, open space and path projects
• Street, sidewalk, transportation and safety improvements
• Climate resilience and stormwater infrastructure

All of these projects reflect essential investments for the future and reflect City Council and community priorities.

Lower Interest Rate

The ratings were in conjunction with the City's sale of $162.8 million in General Obligation bonds, which included the refinancing of $52.2 million in existing debt in early March. Because of the City's excellent ratings, the bonds were sold at a True Interest Cost of 2.157 percent. The refinancing of existing debt enabled the City to save $2.1 million and reduce its debt service cost over the next several years.

"I am incredibly proud of our track record in achieving this incredibly unique distinction year-after-year," said Cambridge City Manager Yi-An Huang. "It is an extremely rigorous process and validates the City's position as a fiscal leader in local government. Through this year's process, the City secured its lowest interest rate in several years. As a result, the lowering borrowing costs will save taxpayers and ensure that more of every dollar goes toward investing into infrastructure and improvements our community members rely upon and not towards interest payments."

"With an increasingly volatile economy and uncertainty around federal government support, it is more imperative that we maintain and follow strong fiscal policies and practices, while ensuring we more carefully and prudently plan in order to sustain fiscal health and stability," said Assistant to the Cambridge City Manager, Fiscal Affairs, Claire Spinner. "These practices will enable the City to prioritize major projects and support the most significant needs within our community."

Why Moody's Investors Service Gave Cambridge Another AAA

Moody's highlighted several key strengths behind the City's continued top-tier rating, including:

• City has ample operating flexibility given a large amount of unused levy capacity under the tax levy limit
• Strong reserves and liquidity, exceeding those of most similarly rated municipalities
• Strong fiscal management and governance that is committed to maintaining a healthy financial position based on conservative budget forecasting and formal policies

Why Fitch Gave Cambridge Another AAA

Fitch highlighted several key strengths behind the City's continued top-tier rating, including:

• Financial profile remains very strong
• City has 'high-midrange' level of budgetary flexibility and an expectation that unrestricted general fund reserves will be maintained at or above 10% of spending
• Long-term demand is expected to be sound due to Cambridge's central location near the city of Boston, its importance as a research center for life and sciences companies and the presence of two of the country's leading higher education institutions

Why S&P Gave Cambridge Another AAA

S&P highlighted several key strengths behind the City's continued top-tier rating, including:

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