City’s New Credit Rating Highlights Remarkable Financial Resilience

Maricopa, Arizona, has received an upgrade from Fitch Ratings, one of the nation’s leading credit agencies.

The city’s default rating improved from AA to AA+, reflecting significant economic and residential growth as well as enhanced budgetary flexibility. The upgrade, which translates to a score of 9.6 on a 10-point scale, highlights Maricopa’s “financial resilience,” according to Fitch.

In addition to the upgrade, Maricopa retained its AAA rating on general obligation bonds from the previous year, marking the highest rating possible.

According to Fitch, this status demonstrates Maricopa’s very high credit quality and indicates a low risk of default. The new AA+ rating signifies a “very strong capacity” for the city to meet its financial obligations and suggests it is not significantly vulnerable to foreseeable economic challenges.

One of the key factors contributing to the city’s favorable rating is its general fund reserve, which stands at a minimum of 7.5% of total spending.

However, the ratings could be vulnerable to future declines if the reserve dips below 7.5%, or if the local economy weakens or population growth slows. Fortunately for the city, anti-growth candidates were defeated in the recent municipal elections on July 30, allowing Maricopa to maintain its strong credit standing.

This positive trend in financial ratings is not new for Maricopa. In October, S&P Global also awarded the city an AA+ rating for a $41 million revenue bond intended for capital improvement projects.

S&P Global attributed this favorable rating to the city’s “exponential economic growth,” bolstered by trends in sales tax revenue and ambitious growth plans.