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October 18, 2013

Lawrence's credit rating nudges up

LAWRENCE — Mayor William Lantigua has been endorsed for re-election by city firefighters and claims other endorsements ranging from cab drivers to hair dressers.

Yesterday, he got another slap on the back — although not an endorsement — from Wall Street, when a credit rating agency raised the city’s rating half a notch, citing its reversal of fortune under Lantigua, his budget director and the state-appointed fiscal overseer.

In an upbeat but cautious assessment that stressed the city still faces formidable financial and social challenges, Standard & Poor’s raised the city’s credit rating to A-, the agency’s third highest for a municipality.

The upgrade means S&P believes Lawrence has a “strong capacity” to pay its bills but would be stressed if the economy worsens. The half point uptick, from BBB, will allow the city to command more competitive interest rates when it borrows because it will be considered a better risk for investors.

A second Wall Street firm, Moody’s Investors Services, said it is leaving Lawrence’s rating unchanged at Baa1, which is eighth from the top on the agency’s ladder of 21 rankings.

S&P’s half-a-grade upgrade comes less than three weeks before the Nov. 5 election, when voters will choose between Lantigua and City Councilor Daniel Rivera, who as chairman of the council’s budget committee has put a microscopic focus on spending. Both scrambled to take credit for the upgrade.

“It’s hard to believe that after the mess I inherited, I would be announcing such a significant accomplishment today,” Lantigua said in a prepared statement, referring to the $21 million debt he inherited from former Mayor Michael Sullivan. “The tough decisions, the watchful eyes and our new internal controls have helped make this possible.”

The state gave Lantigua special permission to borrow to wipe out the earlier deficits and also allowed him to borrow $3 million more to cover the deficit in his own first budget in 2010.

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