S&P Global gives Camden a Positive Outlook
Maintains Investment Grade Bond Rating
(Camden, NJ)- Mayor Francisco “Frank” Moran announced today that Standard & Poor’s Ratings Services (S&P), the global municipal rating agency, has assigned a positive outlook to the City of Camden’s investment grade bond rating of BBB+. After more than 50 years of financial decline the city is becoming financially stable and trending towards a sustainable future. Prior to S&P’s rating increase in 2014, when the City received a BBB+ investment grade, Camden was operating on a junk bond status, which crippled the opportunity for capital expenditures in City infrastructure.
Since 2013, close to $3 billion in private and public investment has been made throughout the city with the expansion and growth of some of the region’s largest corporations. Furthermore, the Camden City School District has had record student achievement growth for four consecutive years and cut its dropout rate in half. The City has also received national attention for a 50-year low in crime and a 30-year low in its unemployment rate and record job growth. This positive outlook and baseline financial controls and practices also provide a vehicle for the city to drive into the next ratings upgrade of A-.
“This is outstanding news for Camden, our residents, our business community, our school district and all of our community stakeholders who have played a vital role in uplifting our City,” said Camden Mayor Frank Moran. “Camden’s resurgence is undeniable, and investors remain confident in our City. Despite downturns in many other urban communities, Camden has sustained its growth. Due to corporate commitments, sustained development and strong leadership, Camden continues to trend in a positive direction. We look forward to working with the State, County, corporate partners and our anchor institutions like the Eds & Meds, to achieve upgrades to our municipal bond rating.”
S&P stated in its report, “We believe that the current administration maintains sound budgeting practices with a focus on a stable financial position through continued fiscal practices and policies.” The report went on to say, “We also view the city’s economic trajectory as improving…Camden’s unemployment rate has improved considerably over the past five years, and currently stands at 7 percent, which on an average annual basis is the lowest it has been in nearly 30 years. Management credits the improved unemployment to significant redevelopment efforts in the city and economic investments spurred, in part, by New Jersey Economic Development Authority economic incentives provided through the Economic Opportunity Act of 2013.” It also noted “We believe improving safety in the city contributes to the city’s ability to attract new businesses throughout Camden.”
According to David Thompson, CEO of Phoenix Advisors, the City’s municipal advisor, the assignment of a “Positive Outlook” is a clear indicator that the economic development seen throughout Camden is structurally improving its credit fundamentals; he said “it will lead to an “A” category rating as the trends continue.”
Freeholder Director Louis Cappelli Jr. talked about the transformation in the city being the lead catalyst to the change in the bond rating and future outlook.
“This is another in a series of positive steps for the City, its residents, and the business community that has made the generational commitment to make Camden their home. For decades there was little to no investor interest in Camden, but that tide is finally turning. Investors have seen the incredible economic growth and improvements in crime, education, and quality of life in the City,” Cappelli said. “This will undoubtedly be just one of many more improvements to the City’s bond rating and to the strength of investor confidence in Camden.”
In the 2011-12 academic year, three Camden School District students were prepared for college from the entire student body. Since that time, the graduation rate has grown to almost 70 percent, the drop-out rate was cut in half and school suspensions were reduced by 53 percent. Furthermore, SAT participation has grown by 46 percent and the district has had more than $360 million in school investments including a new traditional public Camden High School.
“We are excited to share this wonderful news with our students, families and staff. As a district, we have had four consecutive years of student achievement growth that has driven the graduation rates up and cut the dropout rate in half,” said Camden City Schools Superintendent Katrina McCombs. “Every day we continue to work to provide every student in Camden with a quality education in a state-of-the-art facility. Whether it is investing in Camden High or creating new early childhood options for parents we are transforming the landscape for our students.”
Outside of the growth in public education and the reduction in violent crime in the City there have been significant resources invested in public parks, youth recreation and Camden’s overall infrastructure.
Cooper’s Ferry Partnership CEO, Kris Kolluri, explained the additions to park land, public greenspaces and new housing units have had a direct impact on the quality of life of residents.
“We are looking at a historic change in the city in every facet of life, whether it is more than $40 million in park investments or the 1,000 units of new or renovated housing being built throughout Camden, this is a generational shift,” Kolluri said. “This, in combination with the continued growth of the Eds and Meds corridor, has redefined the city and made it a hub for growth and the life science capital of the region. S&P Global and the analysts who toured the city understand the sustainability of these investments.”
Prior to the operation of the Camden County Police Department in 2012 someone was being shot every 32 hours. Since that time, the City recorded 22 homicides last year, making it the lowest total since 1985. This trend continued with violent crime and overall crime, making 2018 the safest year for crime in more than 50 years.
“By partnering with local and county officials, business partners, and stakeholders in the City, the Camden County Police Department has worked to rebuild the relationship between law enforcement and residents,” Camden County Police Chief Joe Wysocki said. “The positive impacts of this renewed focus on 21st Century community policing has been directly cited by S&P as a driver of continued investment and development in the City. Our officers remain committed to protecting our community and to improving the quality of life of our residents in any way that we can.”
A bond credit rating represents the credit worthiness of corporate or government bonds. The ratings are published by credit rating agencies, such as S&P, and used by investment professionals to assess the likelihood the debt will be repaid.