Moody’s Investor Service has assigned a favorable A1 rating to nearly $17.3 million worth of bonds issued by the Schenectady Metroplex Development Authority for a variety of projects across the county.
The projects range from streetscape renovations and infrastructure upgrades to General Electric’s new battery plant and the reuse of Schenectady’s old YMCA.
The bonds, which were approved last week by the county Legislature, were a mix of tax-exempt and federally taxable debt securities.
“It’s a very positive rating,” said Metroplex Chairman Ray Gillen on Thursday. “They cite the regional economy as being strong. These bonds are going toward projects that are creating new jobs.”
Moody’s, one of the “Big Three” credit rating agencies, uses a standardized scale to rate debt securities. It assigns ratings from Aaa to C, with Aaa being the highest quality of debt and lowest credit risk. An A1 rating is considered an upper-medium quality of debt with a low credit risk.
The Moody’s report, issued Wednesday, said the A1 rating reflects consistent growth in Schenectady County’s sales tax, its growing economy and its “satisfactory legal provisions.”
Moody’s added that while the debt service coverage — the amount of money needed to meet annual interest and principal payments on the debt — is below average for an A1 rating, the upside is that the county has a consistently growing revenue stream and expanding local economy.
Gillen said Metroplex has used the same guidelines since 2001 to provide for “more than adequate coverage” of its debt payments.
“We are very comfortable with our coverage ratios,” he said.
The bonds will go toward a slew of projects downtown and around the county. One project, the revitalization of lower State Street, is actually a bunch of smaller projects. It includes purchasing property, preparing buildings and sites for redevelopment and other projects that will connect lower State Street with Schenectady County Community College, the village of Scotia and the city’s historic Stockade neighborhood. Some work has already begun, including the installation of new utilities, pavement, sidewalks and lighting.
The bonds will also help Metroplex make improvements to its parking facilities, including the reconstruction of lots, repairs to the Broadway garage, installation of energy-efficient lighting and other upgrades.
Other projects funded through the bonds will help the county develop shovel-ready sites at its business parks and help the city find a new use for the old YMCA building on lower State Street. Metroplex plans to purchase the building and renovate it into office, technology or lab space.
Proceeds of the bonds will be used in part to redeem $5 million in previously issued bond anticipation notes — short-term securities issued in anticipation of a larger, future bond. Those notes were used to purchase production equipment for General Electric’s new battery plant in Schenectady.