City of San Luis Obispo keeps strong bond rating

The city of San Luis Obispo has maintained its strong bond rating from Fitch Ratings, a leader in credit ratings and research, which praised the city’s “excellent financial management,” according to a city news release.

A higher bond rating means that the city pays lower interest rates when it borrows money to pay for a large public project, decreasing the burden on taxpayers.

Fitch retained its AA rating on the city’s lease revenue bonds, a form of long-term borrowing used to finance public improvements where the city pays off the debt using existing revenue.

Fitch said it would give the city a AA+ rating — one step below the highest AAA rating — if it were to issue a general obligation bond, a form of long-term borrowing used to pay for public projects that requires voter approval; the city pays off the debt by levying an extra property tax assessment. The city has no general obligation debt now, said city finance director Wayne Padilla.

Fitch called the city’s rating outlook stable, Padilla said.