DeKALB – Companies like Meta, Kraft Heinz and Ferrara have begun investing in DeKalb and more big investors may follow.

DeKalb’s financial growth has increased its bond rating to A1. Bond ratings are a rating of how likely a city will pay back their debts and how worthy they are to invest in.

The A1 rating increase from Moody’s Investors Services, one of the top three risk assessment firms that rated DeKalb, is caused by DeKalb’s recent economic success. 

According to a press release by the city of DeKalb, this grading increase will likely lead to further economic growth in DeKalb and ease the financial burden on taxpayers.

Moody’s has increased DeKalb’s score from A2 to A1. This is one of Moody’s strongest investment gradings and fifth strongest overall.

In the 1990s DeKalb was given an Aa2 bond rating, Moody’s third highest rating. The rating dropped to A1 in 2017 and in 2020 the rating dropped to an A2 rating, Moody’s sixth highest rating. 2020’s rating was due to DeKalb’s struggling with the state’s pension increase without the reserves it now has or its current economic value added.

According to Moody’s Investors Services report, their reason for increasing DeKalb’s grade comes from several factors.

The biggest factor for the bond rating increase comes from investments by Meta, Amazon, Kraft Heinz and Ferrara Candy. According to Moody’s Investors Services the investments credit $2 billion in investment to DeKalb.

DeKalb’s improved financial profile leading to increased fund availability was also cited increasing the score. It is expected the city will end the year with more than $30.4 million in fund reserves, according to a press release by the city of DeKalb.

Another factor for DeKalb’s bond increase comes from NIU as an anchor for the region’s economy. NIU’s bond rating is Baa2, in the strongest investment category like DeKalb, but ninth strongest overall.

DeKalb’s home-rule government also improved its rating. The home-rule government allows it to be flexible with revenue raising.

The increased rating will likely save taxpayers money, Bill Nicklas, DeKalb city manager, said in a press release.

The rating increase will also make DeKalb more appealing to investors leading to further economic growth and better pricing, such as bonds for construction for DeKalb’s fourth fire station.

“The rating upgrade should mean better pricing for the Fire Station #4 bonds but it also sends an important message to business prospects and state agencies: DeKalb is fiscally strong,” Nicklas said in a press release.

Moody’s report listed three potential worries to DeKalb’s continued financial growth. DeKalb’s economic metrics compared to its peers trails behind them. DeKalb also relies on economically sensitive revenue. Finally, the high overall leverage, mostly driven by pensions, is a challenge to DeKalb’s credit.