“As City Council, our aim is to support policies that provide for growth in Asbury Park while keeping a strong commitment to fiscal oversight and financial administration,” said Mayor John Moor, “We will continue to manage our expenditures as we also strive to provide excellent services and programs for our residents and business community. This upgrade from Moody’s certainly reflects the emphasis that we have placed on our spending and our conservative budgeting practices.”
New York, January 19, 2023 -- Moody's Investors Service has upgraded Asbury Park, NJ's issuer rating to Aa3 from A1. The issuer rating reflects the city's credit quality and ability to repay debt and debt-like obligations without consideration of any pledge, security, or structural features. Concurrently, Moody's has assigned a MIG 1 to the city's $11.4 million Bond Anticipation Notes consisting of $2.8 million General Improvement Notes, $7.6 million Transportation Utility Notes, $86,000 Sewer Utility Notes, and $1 million Beach Utility Notes.
RATINGS RATIONALE
The upgrade of the issuer rating to Aa3 from A1 reflects the city's continued improving financial position, even through the pandemic. The city's management team continues to utilize conservative budgeting and active control over spending leading to positive operations. The city also benefits from ongoing development, specifically in its beachfront area, which has led to positive economic activity and growing revenues. Full time resident income continues to be below average but is mitigated by a strong second-home and seasonal population. The city's long-term liabilities are largely driven by pension and OPEB which will remain above-average in the near-term.
The MIG 1 rating reflects the strong underlying credit quality of the city, as reflected in its Aa3 issuer rating, and its history of market access.
RATING OUTLOOK
Moody's typically does not assign outlooks to local government issuers with this amount of debt outstanding.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
- Sustained decline in long-term liabilities and fixed costs
- Improvement in resident income
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
- Material increase in leverage and fixed costs
- Contraction of the local economy
- Decline in reserves
- Downgrade of the city's long-term credit quality (short-term)
LEGAL SECURITY
The notes are general obligations of the city for which the full faith and credit of the city is pledged for the payment of principal and interest on the notes. Unless otherwise paid from other sources, the city has the power and is obligated by law to levy ad valorem taxes upon all taxable property within the city without rate or amount.
USE OF PROCEEDS
The notes will be used refinance a portion of the city's outstanding bond anticipation notes and provide original financing for various capital projects around the city.
PROFILE
The City of Asbury Park is located on the Atlantic coast in Monmouth County (Aaa stable) in central New Jersey (A2 positive), approximately 40 miles east of Trenton (Baa2 negative).
METHODOLOGY
The principal methodology used in the short-term rating was Short-term Debt of US States, Municipalities and Nonprofits Methodology published in July 2020 and available at https://ratings.moodys.com/api/rmc-documents/67339. The principal methodology used in the long-term rating was US Cities and Counties Methodology published in November 2022 and available at https://ratings.moodys.com/api/rmc-documents/386953. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of these methodologies.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on https://ratings.moodys.com/rating-definitions.
For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the issuer/deal page for the respective issuer on https://ratings.moodys.com.
Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.
Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://ratings.moodys.com/documents/PBC_1288235.
Please see https://ratings.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.
Please see the issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each credit rating.
Susanne Siebel
Lead Analyst
REGIONAL_NE
Moody's Investors Service, Inc.
7 World Trade Center
250 Greenwich Street
New York 10007
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Douglas Goldmacher
Additional Contact
REGIONAL_NE
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653