At a time when most units of government, as well as many private entities, are struggling and seeing their financial ratings fall, Cranberry has moved in the opposite direction. Its previous rating – a very high Aa3 – is now an even higher Aa2 – just two steps from the pinnacle of the Moody’s Investor Service scale. But the new rating does not reflect a material change in the Township’s finances, according to Finance Director Vanessa Gleason.
Instead, the change reflects a recalibration in the way Moody’s expresses the results of its analyses which, until now, have used different scales to rate different types of entities – a disparity which investors found confusing. The recalibrated scale, which is being phased in by market segment, will allow investors to directly compare the grades of prospective investments between different sectors of the economy. An announcement of the change was made at the April 29 meeting of Cranberry’s Board of Supervisors.
As a practical matter, the new rating could make the purchase of Cranberry’s debt obligations more attractive to potential investors and reduce its cost of future borrowing. A series of bonds which Cranberry used to pay for the expansion of its sewage treatment plan will become eligible for refinancing next year. That will provide the Township its first opportunity to apply its new rating to borrowing in the nation’s financial markets.