Speer Financial, Inc.  Public Finance Consultants since 1954
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Information & Resources

Credit Rating Criteria

There are many criteria that the rating agencies examine when considering a credit rating. The Credit Rating Criteria below is intended to assist in understanding categories and criteria. Rating agencies obtain information from annual financial statements, audits, census, local planning reports, state labor department statistics, and other sources. Rating agencies are paying increasing attention to management as a factor in the rating process. The intangibility of management makes this more difficult to quantify.

Credit Rating Criteria
Multiple Year Trends and Single Year Geographic Analysis

Board-Staff Relations Fund Balance/ Discretionary Reserves Budgeting-Operations & Capital Direct (Issuer) Debt Levels and Retirement Rapidity Employment by Industry & occupation
Union Contracts/ Outlook For Salary Increases/ Labor Peace Cash Flow/ Liquidity Capital Needs Indirect (Overlapping) Debt Levels Largest Employers - Issuer and Area Unemployment
Vision/ Strategic Planning & Risk Taking Revenue Mix/ Balance/Growth of Base Economic Development/ Redevelopment Future Needs Population Trends
Planning/ Preparation Balance Sheet Financial Goals Issuance Authority/Availability Largest Taxpayers/ Industry Concentration
Creativity/ Innovation Revenues and Expenditures - Extraordinary items? Growth Management Debt Structure/ Asset Life Per Capita & Household Income
Responsiveness Tax Extensions & Collections   Pension & Retirement Obligations/ Funding Home Values, Affordability, Ownership, Distribution
Consistency Equalized Assessed Valuation (residential, commercial, industrial mix)   Availability of Internal Funding for Capital Purposes Effective Buying Income - Personal Income
Operational Efficiency Tax Rates (Individual Funds & Overall)   Off Balance Sheet Obligations Private Investment Trends
Leadership Stability - Administrative & Elected Ability to Compress Spending Growth   Source/Strength of Debt Repayment Revenues  
  Revenue/Rate Raising Flexibility