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The town of Princeton received the highest possible rating in credit evaluations by Moody’s on Friday and by Standard & Poor’s on Monday, according to town Director of Finance Kathryn Monzo. This is Princeton’s first credit evaluation since the former Township and Borough consolidated in January of this year.

Standard & Poor’s and Moody’s are two of the three bigcredit-rating agencies that publish financial research and analysis on stocks and bonds. Princeton’s current rating in the Standard & Poor’s system, AAA, released Monday, indicates that the town has an extremely strong capacity to meet its financial commitments. This year, only 3 percent of New Jersey’s 565 municipalities were rated AAA. Moody’s rating for Princeton, Aaa, means the town’s obligation is judged to be highest quality with minimal credit risk. It will be released to the public on Friday.

“The fact that we have a good-standing relationship with the University, that certainly is looked upon as favorable by both the rating agencies,” Monzo said. Monzo said she knew the rating agencies were aware of the voluntary payment-in-lieu-of-taxes contribution that the University makes to the town budget every year. Last year’s payment was nearly $2.5 million.

“The University and the town’s relationship is much more than just the contribution that they make. It’s the overall coexistence that they have,” Monzo explained.

Monzo, who was also a financial officer in the former Township, said she thought that combining the finances of both former municipalities, which were already strong, put the town in an even stronger financial position.

Both the Borough and Township recorded high ratings even prior to the consolidations. Last year, Standard & Poor’s rated Princeton TownshipAAA and Princeton BoroughAA+, its second-highest rating, according to The Times of Trenton.

As the town prepares to go to market next week, the rating will allow municipal bonds for Princeton to sell at very low interest rates, Monzo said. “Better interest rates means a savings for our taxpayers,” she added.

According to a Nov. 3 municipal market update by BlackRock, an investment firm with expertise in municipal bonds, the nationwide municipal bond market performance for the third quarter was quite impressive, despite the weak economic data.

Although the high credit rating indicates town’s finances are in healthy shape, Princeton still has a nearly $97 million debt, approximately $64 million from the Township and $32 million from the Borough, according to The Times of Trenton.The town’s next goal would be to decrease the size of debt while maintaining its current credit rating.

Correction: Due to an editing error, an earlier version of this article mischaracterized the impact the rating will have on municipal bonds. It will allow them to sell at low interest rates. The 'Prince' regrets the error.

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