Pasadena’s Bond Rating Downgraded

Fitch Ratings recently downgraded the City of Pasadena’s implied general obligations bond rating from AAA to AA+, largely due to the rising costs of the Rose Bowl stadium renovation.

Another major credit ratings agency, Standard & Poor, continues to list the City as AAA.

Fitch Ratings said the City Council’s decision to take out an additional $30 million in bonds for the Rose Bowl in January ultimately triggered the downgrade, the Pasadena Star-News reported.

The city has an overall debt of $7,255 per capita, much of which is supported by revenues from local tourism, the Convention Center and downtown parking structures, the Star-News reported.

“Pasadena has a significant amount of debt that is being paid from non-general fund sources that could potentially be paid from the operating budget if those other revenue sources don’t perform as expected,” Fitch analyst Matthew Reilly told the newspaper.

The credit agency also downgraded Pasadena’s $27.5 million in taxable lease revenue refunding bonds, its $156.3 million in lease revenue bonds, its $114.6 million in pension obligation bonds and its $177.6 million in outstanding certificates of participation

“Right now the impact is fairly minimal,” Pasadena’s Director of Finance Andy Green told the Pasadena Star-News. “In the marketplace right now, the city is not looking at issuing any additional debt.”

Pasadena City Manager Michael Beck told the Star-News that Standard & Poor’s rating agency still lists the city with a AAA rating.