OREANDA-NEWS. S&P Global Ratings assigned its 'AA+' long-term rating and stable outlook to Saugus, Mass.' $6.64 million series 2016 general obligation (GO) municipal-purpose loan bonds and assigned its 'AA+' long-term rating and stable outlook to the town's existing GO debt.

S&P Global Ratings also assigned its 'SP-1+' short-term rating to the town's $2.541 million bond anticipation notes (BANs).

"We do not expect to change the rating within the outlook's two-year period. Over time, however, if Saugus were to continue its strong budgetary performance, leading to an increase in reserves while mitigating long-term liabilities, coupled with an increase in economic indicators, we could raise the rating," said S&P Global Ratings credit analyst Steven Waldeck. "While currently unlikely, if budgetary performance were to deteriorate significantly, leading to diminished reserves, we could lower the rating."

Officials plan to use series 2016 bond proceeds to finance and refinance various municipal capital projects. The town's full-faith-and-credit pledge, subject to limitations of Proposition 2 1/2, secures the bonds. Despite limitations imposed by the commonwealth levy limit law, the rating service did not make a rating distinction for the limited-tax GO pledge due to the town's flexibility under the levy limit.

The short-term rating reflects the application of S&P Global Ratings' criteria for evaluating and rating BANs. In the rating service's view, the town maintains a very strong capacity to pay principal and interest when the BANs come due. The town maintains a low market-risk profile since it maintains strong legal authority to issue long-term debt to take out the BANs and because it is a frequent issuer that regularly provides ongoing disclosure to market participants.