MERRIMAC – The town’s ability to receive better rates when borrowing money for municipal projects received a boost last week when S&P Global Ratings announced a bond rating of AA+
The rating is a three-notch bump from the A1 given to the town by Moody’s Investors Service, another bond rating agency, in 2003, according to Carol McLeod, Merrimac’s financial director.
The announcement from the national independent bond rating group comes as the town is about to issue $8.5 million in bonds to pay for a new police station, Town Hall repairs and a new roof for the public library. The higher the bond rating, the lower the interest the town will have to pay.
McLeod said Merrimac sought an updated bond rating in anticipation of borrowing money for the three projects and called it “extremely important” when the town goes to the bond market to finance capital projects.
“The town is very pleased with the recent bond rating increase.
The bond rating company completes a very detailed review of the town’s financial health, looking at the reserves, financial management policies in place, overall management of the Town, as well as socio-economic factors,” McLeod said in a statement.
The town has a strong and stable economy, plenty of budgetary flexibility, and is experiencing growth in commercial and residential real estate markets due to its affordability, according to S&P’s report.
“The stable outlook reflects our expectations that Merrimac will sustain good financial practices and policies that contribute to generally strong and predictable budgetary performance,” the report reads.
“The outlook also reflects our view of the town’s overall strong underlying wealth and income levels, which will likely ensure credit stability.”
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