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City treasury reports $7.5 billion outstanding debt and $2.12 billion in cash and investments; ratings remain strong
Summary
The Department of Treasury reported about $7.5 billion in outstanding debt (largest share to Aviation and Watershed), net cash and investments of roughly $2.12 billion, an average portfolio yield near 4.1%, and continued top ratings including the city's first Fitch AAA for some credits and improved airport ratings.
Courtney Knight, head of the Treasury Debt and Investments unit, told council the city’s outstanding debt portfolio stands at approximately $7,500,000,000, with about 48% tied to the aviation enterprise and 35% to the Department of Watershed Management. The City issued a small ‘‘baby bond’’ of $4,000,000 that Treasury said state law permits annually without a referendum.
Knight said cash and investments totaled just over $2.12 billion and that the portfolio seeks safety and liquidity while earning yield; Treasury reported an average yield of about 4.1% and noted a recent net decrease in cash and investments largely tied to a cash optimization transaction for Watershed and higher outlays.
On credit quality, the treasury presentation highlighted the city’s first Fitch AAA rating in its history for a portion of its credits and upgrades to airport ratings from pandemic era downgrades; Watershed and other obligations continue to carry strong ratings from Moody’s and Standard & Poor’s.
Council members asked whether refunding opportunities existed; Treasury said it had not identified net present value savings over the past year but expected a possible refunding of some Watershed bonds in the near term.
