San Francisco, CA – Mayor London N. Breed today announced that S&P Global Ratings (“S&P”)—one of the world’s “Big Three” credit agencies—has upgraded San Francisco’s general obligation bond rating from AA+ to AAA, the highest possible S&P rating. This follows the City’s general obligation bond upgrade by Moody’s, another of the “Big Three” credit agencies, to its highest rating of Aaa in March 2018. These ratings are the highest the City has achieved in approximately 40 years, and will allow the City to issue debt at lower borrowing costs.

The S&P rating upgrade is largely attributable to the City’s strong management, sustainable budgeting and financial policies and practices, improved reserve position to weather the next down-cycle, robust tax base, and position as aregional economic center. The AAA rating additionally reflects the strength of the voter-approved, unlimited property tax pledge securing the bonds. While S&P cites social service demands, infrastructure deferred maintenance, and pension and Other Post-Employment Benefits (OPEB) costs to be among San Francisco’s most costly long-term challenges, the stable outlook reflects S&P’s view that the City “will continue to show spending discipline” over the next two years. S&P views favorably San Francisco’s budgeting approach amid a prolonged period of economic growth and notes “continuity in the finance and budgeting functions” at the City in recent years.

"This higher bond rating means lower costs for San Francisco taxpayers,” said Mayor Breed. “This is the result of the work we have done to manage the City’s finances, and I remain committed to making responsible choices with our budget in the years ahead. I have directed City departments to put together a budget that is based around accountability so we can continue to make responsible investments moving forward.”

In January 2019, the City requested ratings in connection with the upcoming sale of approximately $75 million in general obligation bonds to fund a loan program for the acquisition, improvement, and rehabilitation of at-risk multi-unit residential buildings and to convert such structures to permanent affordable housing.

The City expects to sell the bonds on Thursday, February 14^th. Also in connection with next week’s sale, Moody’s and Fitch affirmed the rating on the City’s general obligation bonds at Aaa and AA+, respectively. The City’s ratings for its general fund lease obligations were affirmed by all three rating agencies at one to two notches lower, a normal relationship between general obligation bonds and general fund secured lease obligations.