S&P Global Ratings Revises Outlook for Local Governments

Petersburg, Virginia:  Petersburg Investment Advisers, Davenport & Company LLC, have informed the City that S&P Global Ratings (S&P) has revised its outlook to stable from positive on various long-term and underlying ratings on tax-secured debt issued by local governments. This action applies to the ratings of 91 issuers and 121 distinct security pledges supporting a variety of ratings on individual debt obligations. 

Effective Friday, April 17, 2020, S&P took industry-wide action moving all “Positive Outlooks” to “Stable Outlooks” on all municipal credits due to the current economic environment.  This move affects the City of Petersburg’s current rating of “BBB-“ with a Positive Outlook that was received in December 2019. The City’s rating will be revised to “BBB-“ with a Stable Outlook. This change is not due to any action or inaction by the City, but rather the economic outlook due to the COVID-19 pandemic affecting localities nationwide.

Factors considered by S&P during their deliberation include: (a) over 90% of the U.S. population is under stay-at-home restrictions, (b) abrupt declines in consumer and business spending, and (c) unprecedented increases in unemployment. S&P expects that factors will contribute to the many, varied, and substantial challenges state and local governments will face in the months ahead. Social distancing efforts governments have undertaken to protect the population’s health and safety have also been considered a social risk under S&P’s environmental, social, and governance (ESG) factors.

Link to Full S&P Ratings Article