Athens, a city on the rise, recently received a significant boost to its financial standing with an upgraded bond rating from Moody’s, one of the world’s foremost credit rating agencies. This positive assessment not only enhances the city’s appeal to bond investors but also promises more favorable borrowing terms for crucial infrastructure projects, directly impacting the Athens economy.

Moody’s announced the upgrade of the city’s limited tax ratings for issuer and general obligation warrants from Aa3 to Aa2, citing a robust demonstration of financial strengths. Key factors contributing to this improved credit rating include meticulously managed reserves and liquidity, sustained economic growth, and a manageable leverage profile, all of which underscore Athens’ investment value in the municipal bonds market.

The agency’s optimistic outlook suggests that Athens’ financial position will remain resilient, even amidst the capital demands spurred by a growing population. The Moody’s report specifically highlighted the city’s strong reserves, which consistently equate to a historically high 42 percent of revenue, emphasizing Athens’ burgeoning credit strength within the rapidly expanding Huntsville metropolitan area, a vibrant hub of economic activity.

As one of the “big three” global agencies alongside Fitch and Standard & Poor’s (S&P), Moody’s bond credit ratings are widely trusted by investors seeking reliable indicators of a borrowing entity’s creditworthiness. Beyond the municipal upgrade, Moody’s also elevated Athens Electric’s revenue rating from Aa3 to Aa2, while affirming Athens Water Services’ stable A1 rating, reflecting comprehensive financial health across local utilities.

In its detailed credit assessment, Moody’s pinpointed several intrinsic advantages contributing to Athens’ improved status. These include comparatively lower housing costs within the region, significant ongoing development with 4,400 new homes and several large retail outlets under construction, and a substantial industrial presence. This sizable commercial growth, coupled with an expanding taxable base, has resulted in a strong full value per capita of $150,000 as of 2024.

This week’s upgrade by Moody’s follows closely on the heels of a similar positive revision by S&P, which increased its own credit assessment for the City of Athens from AA- to AA just months prior. S&P’s 2024 assessment underscored the city’s expanding and strong local economy, its location within one of the state’s fastest-growing regions, and conservative budgetary assumptions, all contributing to consistent budgetary performance and very strong reserves, reinforcing the city’s excellent local government finance practices.

Athens Mayor Ronnie Marks emphasized the far-reaching benefits of this bond rating upgrade, extending beyond the city government to critical community institutions such as Athens City Schools. The school system, which relies on the city to serve as its finance agent for capital improvement projects like new facilities, stands to gain significantly from reduced borrowing costs due to the enhanced creditworthiness.

Further highlighting the direct impact on residents, Athens Utilities manager Blair Davis noted that power customers would also benefit from the improved Moody’s rating for Athens Electric. He explained that maintaining a high-quality credit rating enables Athens Utilities to secure lower interest rates for future capital improvement projects, ultimately translating into the provision of utility services at the lowest possible rates for the community.