Hackensack Receives AA Status Credit Rating from Standard & Poors
‘Stable Outlook’ given to City based on “substantial development
HACKENSACK, N.J. —
S&P Global Ratings have assigned Hackensack a “AA" credit rating and stable outlook based on the City’s “strong economy” and “very strong liquidity.” City officials are following through with their debt management plan by securing long-term bonds to ease the debt service component of the City budget for the next 20 years. As part of that plan the City sought and received a favorable credit rating. Strong budgetary performance and flexibility were cited as factors by the rating agency, including the City’s success in “reversing drawdowns for tax appeals and emergency projects reported during previous fiscal years.”
“I’m especially pleased with the ‘AA’ rating and that we’re going in the right direction,” said Hackensack Mayor John Labrosse. “These numbers are all indications of how good a shape our city is in and that the best is still yet to come.”
Hackensack’s “robust” downtown development projects were also praised in the report, which pointed out downtown residential properties have grown in value by over $200 million in only the past five years. According to S&P, during that same period, “Management diligently increased available reserves from $1.4 million in fiscal 2014 over the past 3 fiscal years through cost containment and increases in certain revenue.” Based on current and expected development, S&P concludes “Hackensack’s economy will remain strong over our two-year outlook period.”
“Our city’s finances have always been a top priority to us and this rating is an indication that we are reaching our goals,” said Deputy Mayor Kathleen Canestrino. “The downtown redevelopment remains an integral factor in achieving those goals and as that redevelopment continues, our residents will reap the benefits going forward."
The City’s strong budgetary performance was evidenced by its “stability of financial operations and conservative budgeting.” The report noted Hackensack’s overall net debt is low at 2.1 percent of market value and of that debt, “73.6 percent of direct debt is scheduled to be repaid within 10 years.” S&P calls these “positive credit factors.”
Looking ahead into the future, the report reads “ongoing PILOT payment growth, resulting from substantial development, will support Hackensack’s strong budgetary flexibility and performance.”
“Hackensack has consistently had very strong liquidity; we do not expect a change to these ratios,” the report concludes.