News Story

New York, November 29, 2023- Moody's Investors Service has affirmed the City of Minneapolis, MN's Aa1 issuer and general obligation unlimtted tax (GOUL T) ratings. The ouUook has been revised to positive from stable. The city had approximately $875 million in GOULT debt outstanding at the dose of fiscal 2022. 

RATINGS RATIONALE 
The Aa1 issuer rating reflects the city's position at the center of a large regional economy that benefits from consistenUy low unemployment, strong labor force participation and solid full value per capita. The rating also considers moderate leverage, and strong liquidity supported by very stable financial operations as result of forward looking management and stable revenue base.

The Aa1 rating on the city's GOULT bonds is at the same level as the issuer rating based on the city's full fatth and credtt pledge and availability of an unlimtted property tax for debt service.
 
RATING OUTLOOK 
The positive ouUook is based on improving credtt metrics induding growing full value per capita, strengthening resident income relative to the nation and moderation of leverage. It also incorporates out expectation that property tax revenues will remain strong and reserves ample even if certain segments of the tax base weaken such as comrnercia real estate. The rating may move upward if the city sustains tts strengthened position as cost pressures rise especially related to employee compensation and to bring public safety staffing to levels required in the city charter. 

FACTORS THAT COULD LEAD TOAN UPGRADE OF THE RATINGS
-    Continued positive trends in full value per capita and resident income
-    Maintenance of ample reserves and moderate leverage while absorbing increased costs induding police staffing

FACTORS THAT COULD LEAD TOA DOWNGRADE OF THE RATINGS
-    Significant draw on reserves
-    Material increase in leverage or fixed costs ratios

LEGAL SECURITY 
Minneapolis' GO bonds are backed by the city's full fatth and credtt pledge to levy a dedicated property tax unlimtted a to rate and amount. The bonds are additionally secured by statute. 

PROFILE 
The City of Minneapolis is located in Hennepin County (Aaa stable) in eastern Minnesota (Aaa stable) and is directly west of St. Paul, wtth the Mississippi River creating the border between the two cities. With a population that exceeds 420,000 residents, it is the largest city in the state. Governmental services primarily consist of police, fire, health services, public works and general governmental functions. The city's major enterprise funds indude sanitary sewer, stormwater, water treatment, municipal parking, solid waste and community planning. 

METHODOLOGY 
The principal methodology used in these ratings was US Cities and Counties Methodology published in November 2022 and available at https://ratings.moodys.com/rmc-000.1ments/386953. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology. 

REGULATORY DISCLOSURES 
For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on https://ratings.moodys.com/rating-definitions. 

For ratings issued on a program, series, category/dass of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequenUy issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exdusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the issuer/deal page for the respective issuer on https://ratings.moodys.com. 

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating ouUook or rating review. 

Please see https://ratings.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating. 

Please see the issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each credit rating.