Press Release|Public Finance

KBRA Affirms AA Rating on City of Birmingham, AL General Obligation Bonds and General Obligation Warrants; Outlook is Stable

27 Oct 2023   |   New York


KBRA affirms the long-term rating of AA with a Stable Outlook on the City of Birmingham’s outstanding General Obligation Bonds and General Obligation Warrants.

Key Credit Considerations

Credit Positives

  • Financial management policies and procedures are robust and statutorily required by City Charter.
  • Strong liquidity and fiscal flexibility are provided through a large unassigned general fund balance, as well as additional governmental fund reserves.
  • Birmingham is the main economic driver within the Birmingham-Hoover MSA and the State, with potential for further economic growth.

Credit Challenges

  • The City is dependent on economically sensitive business tax revenues for the vast majority of general fund revenues.
  • Sizable net pension liabilities and extremely low pension funded ratios are the result of more than 16 years of underfunding of the actuarial defined contribution and the receipt of below-target investment earnings. Addressing these liabilities as required by H.B. 510, while fiscally beneficial, is expected to contribute to elevated fixed costs over the medium term.

Rating Sensitivities

For Upgrade

  • A sustained trend of improved pension funding ratios resulting from the steady implementation of pension reforms, including H.B. 510.
  • Continued economic development with long-term stabilization trends and growth in City population and wealth levels.

For Downgrade

  • Sustained deterioration in pension funding levels.
  • An erosion in the economic base that exacerbates revenue volatility.
  • Unreplenished draws on the City’s unassigned fund balance in excess of policy limits.

To access rating and relevant documents, click here.



A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1002579

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