Town Manager Norman Khumalo and Chief Financial Officer Tim O’Leary announced that Standard & Poor’s Financial Services LLC (S&P) Global Ratings has affirmed the town’s strong AAA credit rating.
The AAA bond rating represents the highest level of creditworthiness a municipality can achieve and reflects the excellent and stable financial condition of the town.
“Hopkinton retained its top-tier AAA bond rating from Standard & Poor’s, reflecting very well on the town’s management through the COVID-19 emergency,” O’Leary stated. “The rating agency specifically noted Hopkinton’s very strong financial management practices and prudent budget management as key factors supporting our rating.”
The high rating also allows the town to borrow money at the lowest commercial interest rates possible. The town has retained its AAA credit rating for an issue of $4.9 million in long-term bonds and $5.3 million in short-term bond anticipation notes planned for June 2022.
The borrowings will support nine capital projects and acquisitions for the Hopkinton Public Schools and other town departments. These were approved by voters at Hopkinton’s 2022 Annual Town Meeting in May and at previous Annual Town Meetings.
“This borrowing will support the completion of projects the community supports, including the Main Street Corridor project, major school and municipal renovations, and the purchase of a new combination ladder and pumper truck for the Hopkinton Fire Department,” said Amy Ritterbush, Chair of the Hopkinton Select Board. “The Select Board has been focused on financial transparency and financial stability, and it’s good to see the town rewarded for those efforts through savings on interest costs.”
The rating indicates a bond issuer’s financial strength to pay the principal and interest in a timely fashion. S&P Global Ratings issues the AAA rating only when it considers a creditor’s capacity to meet its financial commitment on its obligations to be extremely strong.
“Given the bond market today, the AAA rating is saving Hopkinton between $200,000 and $250,000 in interest expense over the life of the borrowing, compared to what our costs would be if we had the next lower rating,” said Chris Heymanns, town treasurer.
Added Khumalo, “With the highest credit rating of AAA, Hopkinton obtains needed funds at the lowest possible interest rates, saving our taxpayers money when borrowing for critical projects. Top-notch town staff, capable and involved oversight by citizen boards and committees, and disciplined financial management policies and procedures are part of what make Hopkinton a strong choice for new businesses seeking a stable host community.”