Understanding, Managing, and Communicating Credit Fundamentals

Abstract

This chapter probes the informational content of city credit ratings: what the credit ratings are, why city policymakers should care about credit ratings, and how city policymakers may evaluate credit ratings and make use of their informational content. By explicitly showcasing 12 cities from different contexts, this chapter conducts a comparative evaluation of core credit quality fundamentals for these cases. This analysis looks at the economic, fiscal, debt and financial management, and governance factors that policymakers may leverage to proactively manage the city’s underlying credit quality. It asks: How can policymakers manage city credit fundamentals to leverage access to capital market options? What are the elements of credit quality information that city policymakers may signal? What can city policymakers do to improve their agency? The results give tools to city policymakers to announce their market readiness, regardless of, and perhaps even undeterred by, the context of governance institutions in which the city is nested.