Atlantic City’s credit rating has improved from Moody’s third-lowest rating, Caa3, up four spots to the positive-outlook rating of B2, the investment agency announced late Thursday.
Ongoing efforts to diversify the city’s tax base, the recent and improving health of the casino industry, and the successful implementation of the casino payment-in-lieu-of-taxes program all played a role in the city’s improved rating, Moody’s Investors Service said.
“The Moody’s credit upgrade is one more step in the right financial direction for Atlantic City,” said Mayor Frank Gilliam. “We still have a lot of work to be done, but the City of Atlantic City looks forward to continued growth.”
The rating is also informed by the continued strong oversight of the state, which has a stable rating of A3, Moody’s said.
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“Once again, we are seeing that our collaborative and cooperative approach to turning Atlantic City around was the right path to take,” said Gov. Phil Murphy and Lt. Gov. Sheila Oliver in a joint statement released Friday. “This is a tremendous step in the right direction, and we are committed to working with local leaders to ensure the city’s long-term sustainability and financial viability.”
The Moody’s upgrade comes less than a month after Standard & Poor’s Global Ratings upgraded the city’s credit rating from CCC+ to B.
“The ratings agencies clearly recognize the significant hard work and collaboration being done by Atlantic City and the state to return the city to sound financial footing,” said Lisa Ryan, spokeswoman for the state Department of Community Affairs, which has oversight of the city. “Using the recently issued Atlantic City Transition Report as a guideline and the newly created Atlantic City Executive Council as a catalyst, we are optimistic that the city, state and partners in the civic, private, educational and philanthropic sectors can continue to make progress in such areas as planning and development, economic diversification, employment initiatives and budgetary practices, which will help keep the positive momentum going.”
The city’s new B2 rating reflects its continued but reduced financial and economic distress, Moody’s said.
The rating still remains below investment grade, according to the investment agency.
While the prior rating meant the city was a very high credit risk and in poor financial standing, the new rating means the city is a high credit risk, and the city’s credit is speculative, Moody’s said.
The positive outlook means Moody’s could upgrade the city’s credit rating again in the next 12 to 24 months, the company said.
