Corpus Christi’s looming water crisis has prompted the nation’s largest credit rating agencies to downgrade the city’s credit ratings or put it on notice that a downgrade could be forthcoming.
But how has the Coastal Bend’s longstanding drought impacted Corpus Christi’s creditworthiness, and what does it mean when a city’s credit score worsens? Turns out, a lower credit score can impact everything from a resident’s monthly water bill to whether or not a new business chooses to open its doors somewhere else.
What is happening to Corpus Christi’s credit rating?
Right now, the three major credit rating agencies — Moody’s, Fitch Ratings and S&P Global Ratings — are all keeping a close eye on Corpus Christi as the city stares down a potential level one water emergency.
Moody’s first announced its downgrade in December. Last month, it announced it was placing the city “under review” for another potential downgrade, depending on how the water crisis plays out. On April 8, Fitch Ratings — which is owned by MySA’s parent company, Hearst — said it was downgrading its outlook from “Stable” to “Negative.” And on Monday, May 4, S&P Global downgraded the city’s credit rating by “two notches,” from “A” to “AA-” while also placing the city on a so-called “CreditWatch with negative implications.”
How does a lower credit rating impact a city?
Just as a bad credit score has negative implications for an individual, a lower credit rating can have costly consequences for a city, especially when it comes time to borrow money…