Bond Ratings

A bond rating is a grade given to bonds that indicates their credit quality. Independent rating services such as Standard & Poor’s, Moody’s Investors Service and Fitch Ratings Inc. provide these evaluations of a bond issuer’s financial strength, or its ability to pay a bond’s principal and interest in a timely fashion.

The bond rating is an important process because the rating provides information for investors as to the quality and stability of the bond. The rating greatly influences interest rates, investment appetite, and bond pricing. The independent rating agencies issue their ratings based on future expectations and outlook.

The City currently carries ratings from Standard & Poor’s (S&P) Ratings on outstanding bonds. For GO and CO debt, S&P assigned a rating of “A+” which indicates a strong capacity to meet financial commitments, but somewhat susceptible to economic conditions and changes in circumstances. The most recent outlook gives an opinion that Balch Springs will likely continue to post at least balanced operations and maintain at least strong reserves. S&P does not expect to change the rating over the outlook’s two-year horizon. The ratings demonstrate confidence of the rating agencies in the City’s ability to manage its finances. This allows the City to ensure our tax dollars go farther by borrowing funds at the lowest possible interest rates. Utility Revenue Bonds carry a bond rating from S&P, assigning a rating of "A", which also reflects a strong outlook. 

The City’s economic development corporations issue sales tax revenue bonds that are supported by the 1/4 cent economic development sales tax administered by each corporation. Each corporation is rated separately and independently from the City’s bond rating, and the ratings reflect the revenue streams and obligations of each corporation as evaluated by each rating agency. The outstanding debt of the Type A economic development corporation are taxable bonds, and therefore, are not rated.