Credit worthy: Athens receives upgraded Moody’s bond rating

Published 1:13 pm Friday, August 1, 2025

Bond investors who buy into Athens’ future should feel a little more assured of their interests, even as the city itself could enjoy more favorable rates when it’s time to borrow for infrastructure — all thanks to a recent credit upgrade from Moody’s, one of the world’s “big three” bond credit rating agencies.

Moody’s informed the city this week that it had upgraded the city’s limited tax ratings for issuer and general obligation warrants from Aa3 to Aa2, citing a number of financial strengths that the city had demonstrated to earn its better credit status. Those include strong and improved reserves and liquidity, robust economic growth, and manageable leverage — each a contributing factor in assessing Athens’ investment value to borrowers when the city approaches the bond market for repayable money. 

Moody’s anticipates that Athens’ financial position “will remain resilient despite capital needs driven by a growing population,” according to reflection of the city’s “strong reserves that continue to equate to a historically high 42 percent revenue.” The agency’s report emphasized Athens’ credit strength as part of the rapidly expanding economy encompassed by the high-growth Huntsville metropolitan area.

Along with Fitch and Standard & Poor’s (S&P), Moody’s is one of the “big three” global agencies whose bond credit ratings are trusted by investors as helpful indicators of a borrowing entity’s creditworthiness when weighed against investors’ exposure to financial risk. In addition to upgrading the city’s bond rating, Moody’s also bumped Athens Electric’s revenue rating upward from Aa3 to Aa2, while affirming Athens Water Services as holding its A1 rating. 

“The city benefits from a lower housing cost when compared to other parts of the region,” Moody’s explained in its credit assessment. “Management reports that there are currently 4,400 new homes and several big box retail outlets under construction. The city also continues to host a large industrial presence… the sizable commercial presence, alongside the city’s growing taxable base, has led to a strong full value per capita of $150,000 (as of 2024).”

This week’s rating upgrade comes only months after S&P increased its own credit assessment from AA- to AA for the City of Athens. The agency said at the time of its 2024 credit upgrade that the city demonstrates “an expanding, strong local economy in one of the fastest-growing regions in the state combined with conservative budgetary assumptions and long-term planning that allows Athens to maintain consistent budgetary performance and very strong reserves.”

Athens Mayor Ronnie Marks said this week’s rating upgrade should benefit not only the city, but also Athens City Schools, which relies on the city to serve as the school system’s finance agent when borrowing money to build new school facilities and other capital improvement projects.

“This speaks well of our efforts to provide conservative budgets to the city council each year, to grow our sales tax base and job opportunities and to look for return on investment with retail projects,” said Marks. 

Athens Utilities manager Blair Davis added that power customers should benefit from the improved Moody’s rating for Athens Electric. “By maintaining a high-quality rating, Athens Utilities will be afforded lower interest rates for funding future capital improvement projects, which in turn helps us to supply utility services at the lowest possible rates,” he said.