The City of Berea’s credit rating has gone up, according to a recent report from Moody’s Investors Service. The last time Berea’s bond rating was evaluated in 2008, the city was rated A1. That changed last month when Moody’s upgraded Berea’s bond rating to Aa3.
A statement from Moody’s reported Berea’s upgraded status reflects an “assessment of the city’s implicit general obligation credit strength.” The statement further noted that Berea benefits from its proximity to both Berea College and Eastern Kentucky University. Other factors impacting the rating include “slightly below average resident wealth and incomes, above average taxpayer concentration, stable and strong reserves and liquidity, and manageable debt and pension burdens.”
The Moody’s report notes that a “sustained trend of surplus operations resulting in increasing reserves and liquidity” is one of the factors considered in determining that a city is deserving of a credit upgrade.
In related news, Moody’s affirmed the bond rating of Berea Municipal Utilities (BMU), keeping it at A1. In a statement released last month, Moody’s noted BMU’s A1 rating reflects satisfactory coverage levels, a manageable debt profile, and a healthy liquidity position.
Officials said both the city’s credit upgrade and BMU’s retaining an A1 rating is a positive indicator of the City of Berea and BMU’s overall financial health.