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Posted August 25, 2017

APS Bond Rating Remains Steady

The good rating allows the district to borrow money at a lower interest rate, putting more money directly into schools.

The credit rating of Albuquerque Public Schools has held steady for the past couple of years, with Moody’s once again assigning the district an Aa1 negative rating. The rating allows APS to borrow money for capital projects at a lower interest rate, putting more money directly into schools and other projects. 

“The Aa1 rating reflects the district’s sizeable tax base that serves as the state’s largest economic center,” Moody’s Investors Service wrote in its summary.

Other reasons listed by Moody for the Aa1 rating include the district’s financial stability and healthy reserve fund despite state cuts to its budget. Through conservative budgeting, strict expenditure controls and staff reorganization and reduction, APS has been able to keep 5 percent of its budget in a reserve fund for emergencies.

The negative part of the rating is the result of several credit challenges faced by APS including modest declines in enrollment, charter school competition, increased pension liability and budgetary cuts by the state.

The Moody rating, along with a positive rating by Standards and Poor – another national credit rating company – impacts the rate at which APS can borrow general obligation bonds, approved by voters for capital projects such as new and renovated schools and technology. The better the rating, the less interest the district has to pay, which means more money goes directly into the projects.

In addition, the district is refunding, or refinancing, some of its debt, and the good credit rating will help get a better investment rate.

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