Bond Ratings

Municipalities receive bond ratings from Moody’s or Standard and Poor’s (S&P) when they issue debt, borrowing from creditors to fund local projects.

If Moody’s or S&P give a municipality a higher debt rating, the borrowing costs are lower and can substantially impact the cost of large projects.

Over time, a town’s rating may change, depending on it’s financial circumstances.  Among factors critical to a high rating are:

• Financial controls
• Meeting financial commitments (paying bond holders)
• Wealth and income
• Willingness to tax itself
• Financial reserves
• Level of prior indebtedness

Macroeconomic factors may also impact the rating of all cities and towns.

To see how particular municipalities have trended over time, select this drop down.

Abington Acton Acushnet Adams Agawam Amesbury Amherst Andover Arlington Ashburnham Ashland Athol Attleboro Auburn Avon Ayer Barnstable Barre Bedford Bellingham Belmont Berkley Berlin Bernardston Beverly Billerica Blackstone Bolton Boston Bourne Boxborough Boxford Boylston Braintree Brewster Bridgewater Brimfield Brockton Brookline Burlington Cambridge Canton Carlisle Carver Charlton Chatham Chelmsford Chelsea Chicopee Clinton Cohasset Concord Conway Dalton Danvers Dartmouth Dedham Deerfield Dennis Dighton Douglas Dover Dracut Dudley Dunstable Duxbury East Bridgewater East Brookfield East Longmeadow Eastham Easthampton Easton Edgartown Erving Everett Fairhaven Fall River Falmouth Fitchburg Foxborough Framingham Franklin Gardner Georgetown Gloucester Grafton Great Barrington Greenfield Groton Groveland Hadley Halifax Hamilton Hampden Hanover Hanson Harvard Harwich Hatfield Haverhill Hingham Holbrook Holden Holliston Holyoke Hopedale Hopkinton Hudson Hull Ipswich Kingston Lakeville Lancaster Lanesborough Lawrence Lee Leicester Lenox Leominster Lexington Lincoln Littleton Longmeadow Lowell Ludlow Lunenburg Lynn Lynnfield Malden Manchester By The Sea Mansfield Marblehead Marion Marlborough Marshfield Mashpee Mattapoisett Maynard Medfield Medford Medway Melrose Mendon Merrimac Methuen Middleborough Middleton Milford Millbury Millis Milton Monson Montague Nahant Nantucket Natick Needham New Bedford Newbury Newburyport Newton Norfolk North Adams North Andover North Attleborough North Brookfield North Reading Northampton Northborough Northbridge Norton Norwell Norwood Oak Bluffs Orange Orleans Oxford Palmer Paxton Peabody Pelham Pembroke Pepperell Pittsfield Plainville Plymouth Princeton Provincetown Quincy Randolph Raynham Reading Rehoboth Revere Richmond Rochester Rockland Rockport Rowley Rutland Salem Salisbury Sandwich Saugus Scituate Seekonk Sharon Sherborn Shirley Shrewsbury Shutesbury Somerset Somerville South Hadley Southampton Southborough Southbridge Southwick Spencer Springfield Sterling Stoneham Stoughton Stow Sturbridge Sudbury Sunderland Sutton Swampscott Swansea Taunton Templeton Tewksbury Tisbury Topsfield Townsend Truro Tyngsborough Upton Uxbridge Wakefield Walpole Waltham Ware Wareham Warren Watertown Wayland Webster Wellesley Wenham West Boylston West Bridgewater West Newbury West Springfield West Tisbury Westborough Westfield Westford Westhampton Westminster Weston Westport Westwood Weymouth Whately Whitman Wilbraham Williamstown Wilmington Winchendon Winchester Winthrop Woburn Worcester Worthington Wrentham Yarmouth Abington Acton Acushnet Adams Agawam Amesbury Amherst Andover Arlington Ashburnham Ashland Athol Attleboro Auburn Avon Ayer Barnstable Barre Bedford Bellingham Belmont Berkley Berlin Bernardston Beverly Billerica Blackstone Bolton Boston Bourne Boxborough Boxford Boylston Braintree Brewster Bridgewater Brimfield Brockton Brookline Burlington Cambridge Canton Carlisle Carver Charlton Chatham Chelmsford Chelsea Chicopee Clinton Cohasset Concord Conway Dalton Danvers Dartmouth Dedham Deerfield Dennis Dighton Douglas Dover Dracut Dudley Dunstable Duxbury East Bridgewater East Brookfield East Longmeadow Eastham Easthampton Easton Edgartown Erving Everett Fairhaven Fall River Falmouth Fitchburg Foxborough Framingham Franklin Gardner Georgetown Gloucester Grafton Great Barrington Greenfield Groton Groveland Hadley Halifax Hamilton Hampden Hanover Hanson Harvard Harwich Hatfield Haverhill Hingham Holbrook Holden Holliston Holyoke Hopedale Hopkinton Hudson Hull Ipswich Kingston Lakeville Lancaster Lanesborough Lawrence Lee Leicester Lenox Leominster Lexington Lincoln Littleton Longmeadow Lowell Ludlow Lunenburg Lynn Lynnfield Malden Manchester By The Sea Mansfield Marblehead Marion Marlborough Marshfield Mashpee Mattapoisett Maynard Medfield Medford Medway Melrose Mendon Merrimac Methuen Middleborough Middleton Milford Millbury Millis Milton Monson Montague Nahant Nantucket Natick Needham New Bedford Newbury Newburyport Newton Norfolk North Adams North Andover North Attleborough North Brookfield North Reading Northampton Northborough Northbridge Norton Norwell Norwood Oak Bluffs Orange Orleans Oxford Palmer Paxton Peabody Pelham Pembroke Pepperell Pittsfield Plainville Plymouth Princeton Provincetown Quincy Randolph Raynham Reading Rehoboth Revere Richmond Rochester Rockland Rockport Rowley Rutland Salem Salisbury Sandwich Saugus Scituate Seekonk Sharon Sherborn Shirley Shrewsbury Shutesbury Somerset Somerville South Hadley Southampton Southborough Southbridge Southwick Spencer Springfield Sterling Stoneham Stoughton Stow Sturbridge Sudbury Sunderland Sutton Swampscott Swansea Taunton Templeton Tewksbury Tisbury Topsfield Townsend Truro Tyngsborough Upton Uxbridge Wakefield Walpole Waltham Ware Wareham Warren Watertown Wayland Webster Wellesley Wenham West Boylston West Bridgewater West Newbury West Springfield West Tisbury Westborough Westfield Westford Westhampton Westminster Weston Westport Westwood Weymouth Whately Whitman Wilbraham Williamstown Wilmington Winchendon Winchester Winthrop Woburn Worcester Worthington Wrentham Yarmouth

This chart shows the Moody’s rating for each municipality over time, and I’ve converted these scores to a numeric axis with higher ratings listed above lower ratings.  The annotations on the left and right side show the absolute rating each town had at the beginning and end of periods displayed.

How Would Debt Exclusions Impact Your Town’s or City’s Rating?

A municipality’s level of indebtedness can be compared to the total Equalized Valuation (EQV).

Towns with debt below 1% of EQV tend to have higher ratings, while towns above 4% of EQV have the lowest ratings.  Massachusetts law prohibits a municipality from borrowing more than 5% of its EQV.

Therefore passing numerous debt exclusions before an expansion of EQV occurs may threaten to lower a town’s bond rating, and thereby increase future borrowing costs.

What Are Moody’s Bond Ratings?

Moody’s bond ratings are defined as:

• Aaa: Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.
• Aa: Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.
• A: Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.
• Baa: Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.
• Ba: Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.
• B: Obligations rated B are considered speculative and are subject to high credit risk.

For ratings below Aaa, Moody’s now attaches to these ratings a number 1, 2, or 3, with 1 indicating the higher end of the category, and 3 indicating the lower end of the category.  For purposes of the chart above, I have treated each level as an equal interval, so Ba2 to Ba1 is the same interval as Ba1 to Baa3.

Many towns show a Moody’s upgrade around 2009, and this can be seen by varying the town selected.  Of course, this does not apply to previously Aaa rated towns.