Nashua Mayor Jim Donchess announced that Standard & Poor’s (S&P) Financial Services reaffirmed the City of Nashua’s AAA bond rating – the highest rating possible. Nashua has maintained this rating since 2017.
“A strong bond rating reflects the City of Nashua’s sound financial management practices and the overall good health of our economy,” said Mayor Donchess. “It allows the city to sell bonds and borrow at reduced rates, which will positively affect all Nashua taxpayers.”
The long-term rating also reflects S&P’s view of:
- Nashua’s very strong economy, with access to a broad and diverse metropolitan statistical area (MSA);
- Nashua’s very strong management, with strong financial policies and practices under our Financial Management Assessment (FMA) methodology;
- Nashua’s strong budgetary performance, with a slight operating surplus in the general fund and an operating surplus at the total governmental fund level in fiscal 2020;
- The city’s very strong budgetary flexibility, with an available fund balance in fiscal 2020 of 22% of operating expenditures;
- The city’s very strong liquidity, with total government available cash at 60.7% of total governmental fund expenditures and 7.9 times governmental debt service, and access to external liquidity we consider strong;
- Nashua’s very strong debt and contingent liability profile, with debt service carrying charges at 7.7% of expenditures and net direct debt that is 40.9% of total governmental fund revenue, as well as low overall net debt at less than 3% of market value, but a large pension and other postemployment benefit (OPEB) obligation; and
- Nashua's very strong institutional framework score.
This rating was used for the city to issue bonds sold on August 24, 2021 in the amount of $64,335,000 20/25-year new money and refunding of General Obligation bond issue with an average interest rate of 1.795%. The City received a total of six bids on the bonds. Bond proceeds will be used to fund a portion of the new Middle School project, Street Paving, New Aerial Ladder Truck, Public Health Building Renovations, several projects at the city’s Four Hills Landfill and refund a portion of the City’s October 27, 2011 bond issue, which generated a total savings of $736,736 over the remaining life of the refunded bonds.
“Nashua is one of only a few communities in New Hampshire that holds two AAA ratings from S&P and Fitch,” said City Treasurer David Fredette.