Staff Photo by Robin Rudd / Chattanooga's skyline is seen over the ridge on Moccasin Bend,

Correction: While Hamilton County received a top triple-A bond rating from all three major bond rating agencies — S&P, Fitch and Moody's — the city of Chattanooga got top ratings from only S&P and Fitch. Contrary to an earlier version, the Moody's bond rating agency gave the city of Chattanooga an Aa1 rating. Updated Monday, Nov. 29, 2021, at 9:45 p.m.

Chattanooga and Hamilton County governments have maintained their top bond ratings, reflecting projections that the Chattanooga economy will continue to outperform the U.S. economy.

Hamilton County government received a top triple-A bond rating from all three major bond rating agencies — S&P, Fitch and Moody's. The city of Chattanooga got top ratings from S&P and Fitch and Moody's bond rating agency reaffirmed the city's Aa1 rating.

The favorable ratings, which for Fitch represented an upgrade for the city of Chattanooga to its highest rating since 2007, helped Chattanooga cut the interest rate paid on a new 10-year bond issue to the lowest rate ever.

The city on Tuesday sold $40.6 million of bonds with an interest rate of 0.744570%.

The 10-year notes, designated as Series 2021A and Series 2021B bonds, attracted nine competitive bids, and the effective borrowing rate is a fraction of the bonds being replaced, which carried a coupon rate of between 2.5% and 4%.

City officials project the new bonds, which include $15.1 million in new general obligation bonds and $25.5 million in refunded general obligation bonds, will yield a net present value savings of more than $2.5 million for the city because of the drop in the effective interest rate on the notes.

"Chattanooga's fiscal health has never been stronger, and we're now in a great position to borrow at a lower cost going forward," said Daisy Madison, the city's chief financial officer, who is preparing to retire after nearly three decades at city hall.

In its assessment, Fitch Ratings said Chattanooga is expected to "maintain strong financial resilience throughout the economic cycle" and that "Fitch expects fiscal performance to be consistent ... given the city's history of conservative budgeting and maintenance of healthy reserves above its policy requirement."

some text
Contributed photo / Chattanooga Chief Financial officer Daisy Madison

Fitch also cited the positive impact of expansion plans by Volkswagen, the establishment of the downtown innovation district, the increase in high-tech companies and the significant growth in property values.

"Historical revenue growth and taxable assessed values have trended ahead of national GDP growth, a trend that Fitch Ratings expects to continue due to ongoing economic development and expected growth in population," Fitch said in its Chattanooga assessment.

Chattanooga raised its property tax revenue this year, in large measure to boost city government employees' pay. Chattanooga also has been allocated $38.6 million of American Rescue Plan Act funds, with the first tranche being received in May 2021 and the remaining half to be received in 2022. Mayor Tim Kelly said the city plans to use such funds to support public health and housing initiatives, including investment in underserved communities and improving local infrastructure.

"As we look to make once-in-a-generation investments in Chattanooga's infrastructure, this affirmation of our fiscal resilience means we're well-positioned to build a stronger community at a lower cost to taxpayers," Kelly said. "The financial sector's confidence in our budget and economy will better position us to improve our streets, mass transit system, water and sewer infrastructure, parks and outdoor spaces, as well as critical public services — which together can unlock Chattanooga's true potential."

Hamilton County government also achieved top ratings due to its relatively limited debt and projected economic growth. The county did not raise its property taxes this year and rolled back the effective rate to offset the average increase in assessments from the recent reappraisal process.

"The county is experiencing strong growth in the economic base," the Fitch Rating Agency said in its assessment of Hamilton County. "There are currently multiple projects in different stages of development within county lines that will create several new job sources."

Hamilton County Mayor Jim Coppinger said he is pleased that the bond rating agencies have given top ratings to the county's budget and fiscal health.

"This is again an affirmation of my belief that conservative fiscal policies coupled with an aggressive drive to create economic development has allowed this county to be held as an example of good fiscal guidance," Coppinger said.

Contact Dave Flessner at or 423-757-6340.