Hoboken’s AA+ credit rating

On February 2, Hoboken Mayor Ravi S. Bhalla announced that Standard & Poor (S&P) reaffirmed Hoboken’s AA+ credit rating, which is the “second highest possible rating that can be awarded to a municipality.” 

According to S&P Global Ratings, “Credit ratings are assigned by committees composed of analysts, experts in each asset class, which consider a broad range of financial and business attributes, along with other factors, such as competitive position, business risk profile and the current economic environment, in application of the relevant methodologies.” The purpose of these ratings are to give insight into an area’s economy and credit risk. However, ratings are not fixed. As S&P ascertains, ratings are adjusted over time in order to ensure that “the market has the correct perception of how we view relative creditworthiness” and “to reflect changes to market or issuer specific credit drivers.” 

Hoboken’s AA+ credit rating results from a very strong financial performance and very low credit risk. As Mayor Bhalla reflected on the COVID-19 pandemic and subsequent hardship, he shared how the AA+ credit rating has allowed his administration to enact multiple infrastructure improvements over the years. These improvements include “resiliency parks, water main upgrades, Vision Zero pedestrian safety improvements, and more.” Unequivocally, this high credit rating will continue to benefit the Hoboken community and continue to ensure the health and safety of its residents. 

According to the report, Hoboken’s strengths included “an extremely strong local economy, financial management policies and practices […] with a strong institutional framework, strong budgetary performance, A financial profile that […] will improve in the near term, [and] the City’s strong cash position.” Indeed, Hoboken is continuing on a strong path to success. In fact, in 2018, Hoboken received an AA+ credit rating from S&P due to its “very strong” economy, budgetary performance, budgetary flexibility, and liquidity. This rating represented “a continuation of Hoboken’s economic turnaround since 2008” when Moody’s, another credit rating evaluator, bestowed Hoboken “the S&P equivalent of BBB” rating. Consequently, Hoboken’s 2022 credit rating demonstrates the resilience of the Hoboken economy despite the tribulations of the pandemic, proving that the city is able to maintain its high rating. 

Moreover, according to the report, Hoboken’s high credit rating will “continue to result in savings for Hoboken taxpayers, due to low interest rates and debt service payments when issuing bond proceeds for capital improvements and acquisitions.” Additionally, “the City qualified for low-interest loans with principal forgiveness through the New Jersey Infrastructure Bank to help fund the Northwest Resiliency Park.”

This high credit rating is only the beginning of the success to come for Hoboken. Emily Jabbour, City Council Vice President and Chair of the Finance Subcommittee reflected,

“It is great news to see that the smart financial decisions and investments by Mayor Bhalla and his Administration […] continue to be validated with today’s reaffirmation of the City’s strong AA+ bond rating.” These “smart financial decisions and investments” will no doubt benefit Hoboken residents and improve the quality of life of the community.