East Greenbush Central School District retained its Aa3 credit rating from Moody’s Investors Service on Tuesday. This “high grade” rating reflects the District’s well-managed financial position with healthy reserves, moderately sized tax base with above average wealth levels and manageable debt and pension burdens, according to the report.
The credit rating is reflective of the District’s fiscal health. Much like an individual’s credit score, the District’s credit rating impacts its ability to borrow, as well as the interest rate it pays when it does so.
“This is an important step in maintaining the long-term financial health of the District,” said Assistant Superintendent for School Business Finance Lawrence Edson Jr.
Moody’s updated the District’s credit rating because $6.4 million in bonds will be issued shortly to finance Phases I and II of the $24.7 million capital project that was approved by voters in 2013.
What is the Moody’s rating scale?
The rating scale, running from a high of Aaa to a low of C, comprises 21 notches. It is divided into two sections, investment grade and speculative grade. The lowest investment-grade rating is Baa3. The highest speculative-grade rating is Ba1.
- Aaa – highest rating, representing minimum credit risk
- Aa1, Aa2, Aa3 – high-grade
- A1, A2, A3 – upper-medium grade
- Baa1, Baa2, Baa3 – medium grade
- Ba1, Ba2, Ba3 – speculative elements
- B1, B2, B3 – subject to high credit risk
- Caa1, Caa2, Caa3 – bonds of poor standing
- Ca – highly speculative, or near default
- C – lowest rating, bonds typically in default, little prospect for recovery of principal or interest