In a bright spot for Buffalo school finances, Moody's Investors Service has upgraded the district's bond rating to Aa3 and revised its outlook for the district from "stable" to "positive."
The rating upgrade makes it cheaper for for the school district to borrow money for projects. The higher the credit rating, the lower the perceived risk to investors, which allows the district to gain a more favorable borrowing rate.
This positive development has less to do with the fiscal health of the Buffalo school district and more to do with the state's fiscal health, but we'll take good news wherever we can find it.
The district's Aa3 bond rating reflects high-level creditworthiness. The rating currently affects $13.9 million in refinanced school district borrowing. The rating improvement is tied to the state's creditworthiness because the district is using state aid to pay off the bonds, said Chief Financial Officer Barbara Smith. When the state's bond rating was recently upgraded, so was the Buffalo school district's.
Moody's bond rating scale ranges from Aaa, reflecting the highest-quality bonds, down to C, which reflects lowest-quality bonds that are typically in default.
Moody's upgraded the school district's bond rating in August of last year from A1 to Aa3, meaning school district bonds went from being considered "upper-medium" grade bonds to "high-quality" bonds. At that time, the district's Aa3 rating included a "stable" outlook from Moody's. On October 29 of this year, Moody's reaffirmed the Aa3 bond rating but changed the rating outlook from "stable" to "positive."
-- Sandra Tan