Standard & Poor's (S&P) Global Rating has raised its credit issuer rating from 'A-' to 'AA-' for the City of Placentia, giving the city a "stable outlook." This represents a triple-notch increase from the City's 2020 rating.
"As a longtime advisor to cities and to Placentia, it is so gratifying to see the City achieve this three-notch credit rating upgrade, which is a rare event in the world of public finance," said Larry Kosmont, President of Kosmont Financial Services (KFS). "This amounts to recognition by S&P of the leadership and steady financial policies of the City Council along with the City staff's follow-through and timely execution over the past years."
KFS has been serving the City of Placentia as its Municipal Advisor since 2020.
City Administrator Damien Arrula said the credit rating upgrade "demonstrates that investors recognize that Placentia continues to move in a positive direction and that the City's financial future is bright." He added that it "paves the way for the City to obtain even lower financing rates for future large-scale projects throughout the City, benefiting our taxpayers for years to come."
S&P credited the city's financial discipline and aggregate sales tax revenue from the general sales tax and the Measure U sales tax in fiscal year 2021, which outperformed the City's budgeted amounts. "Coupled with this strong revenue performance is management's discipline in applying its reserve policy, which specifies allocations and uses for new revenue streams, including Measure U sales tax revenue," S&P said.
In addition to the issuer credit rating, S&P upgraded the City's Certificates of Participation rating from a 'BBB+' to 'A+' (three notches) and upgraded the long-term rating and underlying rating on the Placentia Public Finance Authority Lease Revenue Bonds from 'BBB+' to 'A+' (three notches).
Read more here.