Standard & Poor's Corp. is reviewing its BBB bond rating of St. Louis as the city's economy starts to turn around and as a new sales tax is expected to bolster city revenues.
The review, which follows a visit to the city by Standard & Poor's officials last week, could be completed in two weeks, said Arthur Dial, the agency's primary analyst for St. Louis.
The city is showing signs of economic growth, Dial said. He noted that construction in convention and entertainment facilities is reinvigorating the downtown area, and Trans World Airlines has made plans to shift its headquarters and 1,500 employees to St. Louis from New York City.
In addition, voters recently approved new sales taxes that will bring in $11.5 million annually for general city operations and $15.3 million for capital improvements, Standard & Poor's officials said.
"With the sales tax, their financial position should improve," said Sharon Gigante, associate director in municipal finance for the rating agency. "The city's economy has bottomed out stabilized."
Over past decade St. Louis has been hard hit with large layoffs at its TWA office. Layoffs were also seen at defense contractors such as McDonnell Douglas, and large population losses have added to the city's woes. Now St. Louis is trying to remedy that situation and plans to issue $40 million in bonds to help bring TWA's headquarters to St. Louis.
In the meantime, Moody's Investors Service does not have its Baa rating of the city's bonds under review, said Dina Kennedy, the rating agency's vice president and assistant director for the central region.
Fitch Investors Service Inc. also is not formally reviewing its BBB rating of St. Louis, said Fitch managing director Richard Raphael.