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Richmond’s economic future is bright, according to one of the nation’s top credit agencies.
Fitch Ratings has assigned the city its highest bond rating, AAA, permitting the city to borrow money at the lowest interest rates possible. Richmond previously scored an AA+ under Fitch, its second-highest rating. The two other rating agencies, S&P Global and Moody’s Investor Services, currently have Richmond at an AA+ and Aa1 rating, respectively.
“When I came into office, I made the promise of moving the city to a AAA bond rating. Today, that promise has been kept,” Mayor Levar Stoney said in a May announcement. “With the Fitch rating, the city is among an elite class of organizations that have proven financial responsibility at the highest level.”
This upgrade stems from Richmond’s increased dedication to its projects, particularly those in the Diamond District, says Tom Arnold, a finance professor at the University of Richmond. “That tends to be the reason for the higher ratings,” Arnold explains. “It’s projects that are going to enhance the city rather than projects to constantly fix broken things.”
Some Virginia cities, including Charlottesville and Virginia Beach, have the highest rating across all three agencies. As the agencies often match ratings with each other, Arnold said that S&P and Moody could also grant Richmond the highest rating in the coming years.
“Success has a tendency to follow success,” Arnold says. “Plan your projects well and have them always be value-enhancing, and you'll keep that top rating for quite a long time.”
