Miami Beach’s Bond Rating Upgraded Again

Miami Beach, FL – Standard and Poor’s (S&P), one of the nation’s bond-rating services, has upgraded their rating on the City’s bonds from an A+ to an AA-, which is the second upgrade for the City from this firm in six months. In addition, Moody’s has affirmed their A1 rating and has upgraded their outlook for the City from stable to positive. This is a very significant accomplishment for the City of Miami Beach and reflects the City’s continuing efforts to improve its financial position.

“In these difficult economic times, it is unheard of a City to have two increases in its bond rating within a six month period. The City of Miami Beach has accomplished an amazing feat,” said Mayor David Dermer.

In January 2003, the City of Miami Beach Standard & Poor’s upgraded the City’s bonds from an A to an A+. During Fiscal Year 2001, the City received an A1 rating from Moody's. Both ratings were the highest to be achieved in the City's history, until now.

The Standard & Poor’s rating report indicates the upgrade was based on sustained strong financial performance bolstered by established fiscal policies, and strong reserve levels along with ongoing growth and diversification in the tax base. Particular mention was made on the City’s role as a local, regional, and international year-round tourism destination, the strong growth of a large tax base and strong financial performance and position.

Moody’s rating affirmation and change to a positive outlook is based on the City’s solid tourism/entertainment based economy, well-managed financial operations and manageable debt load. The rating also recognizes that while the softening of the tourism market as well as rapid budgetary growth are issues facing the City, the long-term credit fundamentals remain positive.

“We’ve been able to successfully diversify and strengthen our economic base while continuing to grow through prudent fiscal policy and management,” said Miami Beach City Manager Jorge M. Gonzalez. “Our contingency fund for emergencies along with our strong reserves in our enterprise funds was particularly mentioned.”

Both ratings were performed during the agencies visits to the City where presentations were made coupled with extended City tours. These reports were issued in conjunction with the City’s sale of the remaining authorization of $62,465,000 General Obligation Bonds which were approved by referendum in November 1999. These Bonds will be sold and closed later this month.

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