S&P: rates Crete credit AA+

Crete Mayor Mike Einhorn

Crete Mayor Mike Einhorn: ‘Very very happy’

by Dennis Sullivan
editor@ewcnews.com
Feb. 27, 2014

The world’s leading provider of independent credit risk research and benchmarks has raised Crete government’s credit rating to AA+, ranking it with Tinley Park and Orland Park.

The Standard & Poor’s rating “reflects our assessment of the village’s very strong budgetary flexibility and performance, as well as its very strong liquidity,” credit analyst Scott Ness said in a prepared statement.

A high rating merits more than bragging rights. It tells bond issuers that principal and interest (P&I) will be paid on time and in full and, therefore, probably qualifies for a lower interest rate.

Crete Mayor Mike Einhorn formally told trustees Monday the village had “gone up three notches” from A+, saying he was “very very happy.”

Einhorn praised “the ability of the whole board to manage yourself effectively — set up goals and (financial) reserves. It has paid off in our circumstance.”

1 step below highest rating
Crete’s new rating is one step above AA, which S&P describes as a “very strong capacity to meet financial commitments.” The rating is only one step below AAA, S&P’s highest rating, which describes “extremely strong capacity to meet financial commitments.”

The upgrade comes as village officials investigate processes on three municipal wells to reduce iron levels.

Assuming voters approve such a process, the village would have to issue bonds to cover construction costs. A water-rate surcharge would pay back the P&I.

Low debt load
On Wednesday Einhorn estimated the village’s bonding limit at $14 million.

“Right now we owe $680,000 in principal, so our debt load is very very low,” Einhorn said in an email. “Our yearly P&I payment is about $95,000.”

Ness said S&P’s “stable outlook (on the village) reflects our expectation that Crete will continue to post at least strong operating performance over the next few years and will not experience marked decline in its budgetary flexibility or liquidity.”

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Original material copyright 2014 Eastern Will County News; all rights reserved.

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