Mon September 24, 2012
Omaha's bond rating downgraded
It’ll cost the city of Omaha more in interest to borrow money for infrastructure projects.
Late last week, Moody’s downgraded Omaha’s credit rating to Aa1. City Finance Director Pam Spaccarotella says it’ll negatively impact Omaha’s borrowing for several years. "It means that our bonds will be viewed as slightly more risky than a triple-A bond and as a result in order to attract investors for the city of Omaha bonds we’ll have to pay a higher interest rate." She says that higher interest rate could be ten to 25 base points. Spaccarotella says Moody’s downgraded Omaha’s bond rating because of ongoing underfunding of the pension system. Right now, the city’s unfunded pension liability is $794 million.
The downgrade affects so-called General Obligation Bonds, and not the ones being issued to pay for the combined sewer overflow project. Standard and Poor’s kept Omaha’s bond rating at AAA.