News Story

New York, December 18, 2024 -- Moody's Ratings (Moody's) has upgraded the City of
Minneapolis, MN's issuer rating and the rating on its outstanding General Obligation
Unlimited Tax (GOULT) bonds to Aaa from Aa1. The city had about $900 million in
debt outstanding at the close of fiscal 2023 (December 31 year-end). The outlook has
been revised to stable from positive.

The upgrade to Aaa from Aa1 reflects the continued strength in the city's economic
and demographic trends, a consistently strong financial profile and declining long-term
liabilities.

RATINGS RATIONALE

The Aaa issuer rating reflects the city's position at the center of a large and diverse
regional economy that benefits from consistently low unemployment, strong labor
force participation and a growing full value per capita that now exceeds $160,000. The
Minneapolis economy benefits from several large and stabilizing institutions and
favorable demographic trends with a stable to growing population that remains
relatively young compared to an aging state and nation.

The city has a strong financial profile with an available fund balance ratio that typically
hovers between 45% and 50%. Finances will remain strong despite growing public
safety costs given a stable revenue base, sound financial management including
multi-year budgeting and a track record of the willingness and ability to materially
increase the property tax levy. The long-term liabilities ratio has declined to levels well
below 200%, which is in line with Aaa rated peers, and the fixed costs ratio
consistently hovers around 10%. 

The Aaa rating on the GOULT bonds is at the same level as the Aaa issuer rating
because of the city's full faith and credit pledge and the authority to levy a dedicated
property tax unlimited as to rate and amount to pay the bonds.

RATING OUTLOOK

The stable outlook reflects the expectation that the strong regional economy will
continue supporting sound economic metrics and that the city's consistently strong
financial profile will allow it to absorb cost pressures related to employee
compensation and public safety staffing.

FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
- Not applicable

FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
- A weakening of demographic trends or prolonged declines in labor force participation
trends, resident incomes, or full value per capita
- A materially weakened financial profile with an available fund balance ratio
approaching 30%
- A long-term liabilities ratio increasing to levels well above 250%

LEGAL SECURITY
The GOULT bonds are backed by the city's full faith and credit pledge and authority to
levy a dedicated property tax unlimited as 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, with the Mississippi River
creating the border between the two cities. Minneapolis is the largest city in the state,
with a population that exceeds 420,000 residents. Governmental services primarily
consist of police, fire, health services, public works and general governmental
functions. The city's major enterprise funds include sanitary sewer, stormwater, water
treatment, municipal parking, solid waste and community planning.