Wright City will receive their bond rating from the ratings agency S&P Global Friday.
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This story has been updated to reflect the release of Wright City's bond rating
Wright City has received a bond rating of A+ from S&P Global Ratings for their anticipated $6.5 million in series 2024 general obligation bonds according to a release from S&P Global along with a stable outlook meaning the agency does not expect any outside factors to change that rating within the next six months to two years.
Bond ratings range from AAA to BBB- and outlooks are either positive, stable or negative.
Mayor Michelle Heilliger was enthusiastic about the positive rating and said they had learned a lot about how to better manage the city's finances in the process.
"We are super excited and we could not have done it without the help of WM Financial," said Heiliger.
Wright City is now one step closer to going out for bond on the $9 million no-tax increase bond that was passed in the April 2 election. That bond issue, Prop R, allows the city to go out for bond for $9 million to be used on road improvements.
Per the bond language the money is to be spent first on improvements to Roelker Road, where the Wright City R-II School District’s new high school is currently being constructed and is scheduled to open in early 2025.
Before their meeting on Aug. 8, city officials including City Clerk Abbie Ogborn attended a meeting with the S&P Global Ratings Agency to present the city’s financials so the agency can go about creating a bond rating for the city.
Bond ratings are assigned to borrowers, in this case Wright City, on their credit quality and the better the rating, the better the rates a borrower can receive. According to Investopedia, these ratings are used by the agencies to evaluate the strength of a borrower, and the likelihood that they pay their debts and in a timely manner.
Ratings can range from AAA to BBB-, the higher the rating, the better the interest rates and other terms of borrowing.
While the city’s financials will play a large role in the rating when it is issued, Ogborn also focused on some demographic information in Wright City to help explain why they believe the city to be a sound investment.
Citing census data, she said the average age in Wright City was 31 in 2010 and it has since risen to 36 and four months in 2020. She said this means two things.
“That shows that we have a lot of first-time homebuyers, young families that are coming into the city, but also they’re staying in the city for a number of years.
She also pointed to a number of active housing developments that were either currently under construction or will soon be under construction in Wright City as another sign of its financial viability.
Mayor Michelle Heiliger said that they will hear back from S&P on their rating on Aug. 15 and that rating will be final tomorrow, then will be able to move forward with lenders from there to secure funding for their road improvements.
The city has contracted with Cochran Engineering to produce the design for the road improvements which has been received by the city. They plan to go out for bid for the project in November and expect construction to begin around Christmas.
From there the road improvements will tentatively be completed around the end of the school year, roughly five months after the opening of the new high school.
