The city of Camden achieved its highest bond rating in nearly half a century Monday when Standard & Poor’s ratings service announced it has upgraded the city’s investment grade bond rating from “A-” to “A.”
S&P, one of the big three global municipal rating agencies, also maintain the city’s outlook as “stable.”
The upgrade, the city’s third in 10 years, has helped Camden move from sub-investment grade ratings to today’s “A” rating. S&P increased Camden’s rating to an investment grade “BBB+” in 2014. Then, in 2019, Camden was assigned a “positive outlook,” which was a result of the city’s unprecedented economic growth and due to structural improvements made in the city’s credit fundamentals. In 2021, S&P upgraded the bond rating again to an “A-.”
Municipal bonds are issued by local and state governments to help fund public projects or municipal government operations, such as building new schools or repairing city sewer systems. The higher the city’s bond rating, the better rates it gets — thus saving taxpayers money.
Camden Mayor Victor Carstarphen obviously was thrilled by the news. He said the ever-increasing bond rating is the result of the efforts of many.
“The city of Camden is absolutely on the right track and now looked at as a sound investment by independent credit rating agencies,” he said. “Keep in mind, this did not happen overnight, it is the culmination of decades of hard work. I am grateful to Congressman Donald Norcross, Gov. Phil Murphy and the acting commissioner of the Department of Community Affairs, Jacquelyn Suárez, for their unwavering support and commitment to our city.
“We have met their commitment to the city by establishing sound fiscal policies that are protecting taxpayer monies, improving neighborhoods and attracting development. The city’s improved rating is independent verification that the city is moving in the right direction.”
Within the rating report, which is being provided in its entirety, S&P praised Camden.
“Camden’s general creditworthiness consists of improved economic and financial momentum over the past decade, due in part to economic incentives provided by the city, in addition to a renewed focus on enhancing its financial position. Within the past three fiscal years, the city has scrubbed its financial processes, reducing the number of accounts used, eliminating interfund receivables and strengthening reserves.
“As a result of these measures and aided by the infusion of increased state transitional aid in fiscal 2022 ($24 million) as well as $61.6 million in American Rescue Plan Act funds, the city generated a massive $65.6 million surplus in fiscal 2022, dramatically increasing reserves to $82.8 million, or nearly 43% of operating expenses. This is a high-water mark for the city and is materially higher than reserves at the end of fiscals 2020 and 2021.”