Chandler is first Arizona city to receive Aaa bond rating on Excise Tax Revenue bonds

Dec. 21, 2023
Chandler City Hall

CHANDLER, Ariz. –  The City of Chandler was rated this month on its General Obligation (GO) and Excise Tax Revenue (ETRO) bonds, recently authorized for sale by the Chandler City Council. The city once again received the highest AAA/Aaa ratings from all three rating agencies on the GO bonds.

Chandler became the first municipality in Arizona to receive AAA/Aaa ratings across the board for its ETRO bonds. Moody’s Investors service had previously never given such a high rating for this type of debt in Arizona. Dawn Lang, the city’s Deputy City Manager and Chief Financial Officer says, “This historic achievement is a direct result of Chandler’s excellent financial decisions and leadership over the past several years and translates to lower interest rates on the debt, thereby benefitting taxpayers.”

Moody’s cited that part of the reason for the upgraded rating is Chandler’s low and manageable debt burden and rapidly decreasing pension liabilities through the city’s accelerated pension pay down plan. The upgrade to the Aaa rating on the ETRO bonds reflects sustained growth in the excise tax revenue that is expected to continue due to robust economic growth that will drive strong debt service coverage.

The city sold new GO bonds in the amount of $118.714 million and new ETROs in the amount of $75.116 million. The city’s high bond ratings resulted in strong demand from investors, which resulted in low interest rates on both transactions. The bond funds will be used to improve Chandler facilities, parks, streets and utility infrastructure.