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Contact: Date: July 7, 2026 Andrew Squire
PIO, City Manager’s Office
Andrew.Squire@tucsonaz.gov
(520) 306-0080
Tucson Retains High Credit Ratings as it
Enters the Market for New Borrowing
The City of Tucson has again received high bond credit ratings from the world’s leading bond rating agencies following their recent review of the City’s financial strength and management practices. This review was initiated in preparation for the City’s issuance of General Obligation (GO) Bonds and Water Revenue Obligations. The rating agencies also confirmed their ratings for the City’s other outstanding debt issuances.
Highlights from these ratings include the AAA rating from Fitch Ratings for the City’s upcoming GO Bond sale, achieving a stable outlook across the various AA ratings held for both the City and the water utility, and receiving several upgrades from Moody's Analytics, including for the City’s issuer rating, general obligation unlimited tax (GOULT) bonds, and our outstanding certificates of participation (COPs).
 This is excellent news for the Tucson community as high bond credit ratings drive investor interest and allow the organization to secure the lowest possible interest rates when issuing and selling bonds and water revenue obligations. The low interest rates help to ensure that current and future taxpayers and ratepayers will pay as little as possible for debt incurred through the sale of debt to finance long-term capital improvements and that the debt service payments required will not damage the organization’s ability to provide the essential City services expected by the community. Furthermore, lower debt payments decrease pressure on future water rates.
The City plans to enter the market in mid-July to seek $114 million of GO bonds to finance the completion of the voter-approved, Tucson Delivers Prop 407 Parks + Connections program. The City will be selling $79 million of water revenue obligations to finance approximately 40% of the Tucson Water capital improvement program over the next two years. Moody's Ratings stated in their release that "the upgrade reflects the City’s large and growing economic base coupled with stable operating reserves. The revision of the outlook to stable reflects the expectation that the financial position will remain sound, supported by management's demonstrated ability to make timely budgetary adjustments."
The S&P Global Ratings report highlighted that:
- Tucson's economy is stronger in our view than its anchor metrics suggest, supported by its role as southern Arizona's economic center and the presence of stabilizing anchors; low industry and taxpayer concentration; steady population and tax base growth; and expected gross county product expansion.
- Tucson's formal financial framework, anchored by conservative budgeting, multiyear forecasting, active budgetary monitoring, a $127.5-million fixed operating reserve requirement, and integrated capital and debt planning, supports management's ability to identify outyear pressures, preserve financial buffers, and sufficiently respond to budgetary stress should it arise.
- A conservative fiscal framework and broad revenue base have supported consistently favorable budgetary variance and sizable reserves given Tucson's capacity to absorb planned one-time uses of excess fund balance that drive the projected 2026 net operating deficit while adopting a structurally balanced 2027 budget.
Upon receiving the news from the ratings agencies, Tucson Mayor Regina Romero stated, “I am very pleased that our City has retained extremely high bond credit ratings as we look to continue investing in our community’s parks, greenways, and water security. Despite revenue challenges imposed from the federal and state levels, my council colleagues and I continue to prioritize fiscal responsibility. I am pleased that Tucson’s continued economic growth, including my efforts as Mayor to sharpen our focus on prosperity and economic mobility for all Tucsonans, has resonated with the private sector.”
City Manager Tim Thomure stated, “Our City and our water utility continue to be attractive for private sector lending and investment. While we have limited influence over our revenue streams, we focus on what we can control. We center our efforts on robust financial management practices, data-informed decision-making, and an agile approach to managing expenditures. Armed with these strong bond credit ratings, we look forward to obtaining the capital funds required to complete the voter-approved Proposition 407 – Parks and Connections investment program as well as the projects we need to keep our water system reliable.”
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