Compare to the Municipal Bond Market?
October 6, 2014 – OpenGov
Whether AAA-rated or orchestrating a turnaround from recent default, municipalities on OpenGov’s platform signal strong confidence in their fiscal future.
We recently analyzed the creditworthiness of cities on the OpenGov platform relative to the distribution of credit ratings for general obligation (GO) debt in the municipal bond market. The chart below illustrates our findings, showing the distribution of cities on OpenGov’s platform (light blue) compared with all cities that have issued general obligation debt in the municipal bond market rated by Moody’s or Standard & Poor’s (darker blue).
We find a greater share of OpenGov customers in both tails of the distribution relative to the overall market. At the top of the distribution, nearly twice as many OpenGov customers receive AAA or Aa1/AA+ ratings relative to the market as a whole (34.5% vs. 17%) and this difference is statistically significant at the one percent level.
We also calculate the share of cities with bonds rated BBB or lower. The share of OpenGov customers rated at or below this level (7.8%) is more than twice the market rate (3.2%), although this difference is not statistically significant.
Our results seem true to experience. We’re delighted to work with AAA-rated Palo Alto, Tyler, and Mountain View to continue their tradition of solid budget management practices. We’re equally thrilled to work with the leaders of Bell, California and many other cities hard-hit by the Great Recession who are working day and night to revive the financial health of their city.
Governments like these are looking for ways to demonstrate their commitment to responsible fiscal management. At OpenGov, we’re proud to be their partners.
Category: Government Finance