Moody's upgrades Princeton's bond ratings to Aa2

The Town of Princeton announced Oct. 22 that Moody's Ratings has upgraded the town's issuer, general obligation unlimited tax, and general obligation limited tax bond ratings to Aa2 from Aa3.

Moody's also assigned a MIG 1 short-term rating to the town's $12.5 million General Obligation Bond Anticipation Notes. After the notes are issued, Princeton will have nearly $13 million in debt outstanding.

Moody's said the upgrade reflects a trend of positive financial operations and the town's maintenance of strong reserves and liquidity. The rating agency cited Princeton's healthy reserves, robust liquidity and disciplined budget management. The town closed fiscal 2025 with a total available fund balance and net unrestricted current assets of $8.5 million, representing 43.8% of revenue, and fiscal 2025 operations produced a $2.2 million increase in governmental fund balance from operating surpluses and debt issuance for capital projects. Town management expects another operating surplus in fiscal 2026, with revenues projected to exceed expenditures by about 2.2%.

Moody's also noted Princeton's growing property tax base and resident income and wealth measures above national averages.

The agency said debt outstanding will rise temporarily as the town finances construction of a new public safety building, pushing adjusted leverage to approximately 150% of operating revenue from about 107% previously. Moody's said the town's debt burden remains anchored by its growing tax base, limited debt and history of measured capital planning. Pension liabilities remain elevated, though Moody's said fixed costs are modest at about 7% of revenue and the town has consistently funded required retirement contributions.

The MIG 1 rating on the notes is based on the strength of the town's Aa2 issuer rating and its history of market access. The general obligation ratings match the issuer rating because of the town's full faith and credit pledge and its ability to override the tax levy limits of Proposition 2 1/2, according to Moody's.

Source: Town of Princeton announcement, October 22, 2026.

Checked against the record: before publication this article was automatically compared with the original announcement.