Standard & Poor’s Ratings Services has raised its long-term rating and underlying rating on Salem’s general obligation bonds to AA from A+. This marks the highest credit rating on record ever in Salem's history.
In making its determination, the rating agency cited Salem's strong local economy, stable property values, and ongoing positive economic development activities.
They also highlighted strong budgetary flexibility and performance in city finances, as well as sustainable management practices and policies, adequate debt levels, and robust liquidity.
“Despite budgeting challenges, Salem’s financial performance over the past several years has been positive,” the agency wrote in their summary report. “We believe this has been the result of stronger financial management practices and conservative budgeting.”
“This ratings upgrade is welcome news and is reflective of our dedication to sustainable economic growth, stable financial management policies, and sensible budgeting practices,” Salem Mayor Kim Driscoll said in a prepared statement. “Over the last several years we have made a conscience effort to get our fiscal house in order and to keep it that way. This upgrade is yet another sign that Salem is on the right track.”
Salem currently holds about $61.6 million in debt, with debt service comprising only 3.6% of the City’s operating budget expenditures. Salem maintains a highly competitive 1.3% overall net debt-to-market value and anticipates retiring 59% of its current principal within the next ten years.