Scotch Plains Among Just 8% of New Jersey Municipalities to Earn a Aaa Bond Rating

SCOTCH PLAINS – February 6, 2023 – As the Federal Reserve continually raises interest rates to fight inflation, municipal government is eager to pay the lowest interest possible for capital improvement programs.

Fortunately for Scotch Plains, an independent credit rating agency has awarded the municipality with its top credit rating of Aaa.  Moody’s has determined that Scotch Plains’ municipal bonds have the highest degree of creditworthiness because the Township can easily meet financial commitments and has the lowest risk of default.

“Having an investment grade of Aaa means that Scotch Plains can borrow money at the lowest interest rates available,” explained Mayor Josh Losardo. “Our taxpayers can be reassured that the municipality is not saddled with the high interest rates that other municipalities are now facing to fund long-term capital improvements.”

Moody’s evaluated various factors to determine the safety of bonds issued through Scotch Plains. That included an exhaustive review of the municipality’s financial strength, future cash flows to cover interest and principal, collateral assets and securities in case of default.

Town Manager Al Mirabella noted that only four municipalities in Union County have top bond ratings, including New Providence, Summit and Westfield. Statewide, only one in 46 municipalities have achieved the highest ratings through either Moody’s or Standard & Poor’s.

“When you consider there are 564 municipalities in New Jersey, and only 8.15% have a bond rating comparable to Scotch Plains, you can see what a tremendous achievement this is for our community,” Mirabella said. “Because of our fiscal constraint over the years, as well as our strong financial planning, our taxpayers are now benefitting during this era of unpredictable, higher interest rates.”

Losardo noted that Scotch Plains is about to embark on a major downtown redevelopment initiative, requiring strong financial footing that third-party credit agencies recognize.

“I want to commend Scotch Plains’ management and professionals for ensuring that we remain one of the most well-run municipalities in the state,” the mayor said. “Fiscal conservancy and expert leadership have gotten us to the point where credit agencies are recognizing that Scotch Plains offers a very attractive investment vehicle, especially to conservative investors, allowing us to continually pay low interest, despite what we are seeing throughout the municipal bond market.”