City of Bryan Bond Ratings

• What did the bond ratings agencies say about the City of Bryan?
  • Bryan is positioned in a stable regional economy
  • The City of Bryan has a very strong financial position
  • The City of Bryan has strong financial management practices and healthy reserves.

• What is a municipal bond rating?
  • A municipal bond rating is a credit risk evaluation, which is often considered the most important factor affecting the interest cost on bonds.

• Who provides the rating?
  • Three major independent and objective credit rating agencies exist for municipal bonds: Fitch Ratings, Moody’s Investors Services, and Standard & Poor’s. A municipal government may be rated by one, two, or all three agencies; Standard & Poor’s and Moody’s rate over 80% of all municipal and corporate bonds. The City of Bryan is rated by Fitch Ratings and Standard & Poor’s.

• What are the rating criteria?
  • Economy (local/regional)
  • Debt Structure (of the municipality)
  • Financial Condition (of the municipality)
  • Demographic Factors (of the municipality)
  • Management practices of the governing body and administration

• What are the possible ratings issued by the three rating agencies?
  • The following table shows the comparable investment graded ratings of the three major rating agencies with the “Best Quality” being rare:

Note: The bottom line grades of “Medium Grade” are not considered to be investment grade (i.e., they are junk bonds). “C” type ratings (not shown) are considered substantial risks. “D” type ratings (not shown) are considered in default.