The AAA Credit Rating Includes Stable Outlook.
NORFOLK, VA – S&P Global Ratings (“S&P”) this week affirmed the City’s General Obligation (“GO”) credit rating as the highest rating possible – a “AAA” credit rating with a “Stable” outlook. AAA is the strongest possible finding from S&P and Norfolk remains one of just 16 municipalities in Virginia with this S&P rating.
S&P specifically noted the City’s expanding economy, including its ongoing commercial and residential growth; the City’s strong financial management, with particular focus on financial policies and practices that ensure stable budgetary performance and continued strong reserves and liquidity levels; as well as the strong administration of Norfolk’s manageable debt portfolio as major factors in determining the credit rating.
S&P further cited the City’s proactive management of ongoing environmental, social, and governance (ESG) risks. It applauded Norfolk’s neighborhood resiliency efforts to improve the economic power of residents through several different programs, the largest being the St. Paul's Area Transformation. Over time, the St. Paul’s efforts could bolster economic metrics and resiliency efforts as this coastal community continues to safeguard the City’s economy through protecting Norfolk from ongoing coastal flooding. S&P also highlighted the City’s demonstrated push to leverage grants, federal funding and revenue from proprietary funds toward the City’s long-term financial and capital planning, while also leveraging its strategic location and importance.
Credit ratings are one of many tools investors and lenders use to make decisions regarding a municipality’s future financial strengths and weaknesses. The AAA rating indicates the City's financial strength, continued stability and capacity to meet financial commitments, and will continue to assist the City in maintaining low cost of funds to finance strategic capital projects. The stable outlook likewise indicates S&P expects Norfolk to continue to manage its budgetary performance and maintain its strong financial position over the next two years.