S&P Global Ratings raised the City of Surprise’s long-term general-obligation and issuer credit ratings to AA+ from AA, giving the city a stronger position as it finances roads, public-safety facilities and other capital projects.
The city announced the upgrade Thursday, Oct. 1. It applies to Surprise’s previously issued general-obligation debt and to the city’s overall issuer credit rating. The move is a one-step increase within S&P’s investment-grade scale.
In its rating action, S&P cited the city’s expanding and diversifying tax base, strong revenue capacity, very strong reserves, progress on legacy pension liabilities and ability to meet growing service and infrastructure needs. The agency linked those factors to sustained population growth, commercial and industrial investment and disciplined financial planning.
What the AA+ rating means
S&P describes credit ratings as forward-looking opinions about an issuer’s relative ability and willingness to repay debt in full and on time. The AA category indicates a very strong capacity to meet financial commitments, while AAA is the agency’s highest rating.
The plus sign places Surprise at the upper end of the AA category. For residents, the practical significance is mainly the city’s cost of borrowing. A stronger rating can help a government reach a wider pool of investors and may support lower interest costs when bonds are sold or refinanced. It does not guarantee a particular interest rate, because market conditions, the structure of a bond issue and its repayment source also affect pricing.
The upgrade does not itself authorize new debt, change property taxes or approve a construction project. Those steps require separate public decisions.
Why the timing matters
Surprise is carrying a large capital program as population growth increases demand for transportation, fire, police, parks and utility infrastructure. The City Council adopted a fiscal 2027 expenditure budget of $966.6 million in June, including $383.8 million for capital projects.
The budget continues general-obligation bond funding for transportation and public-safety work. Voters approved the city’s 2023 bond program for projects including road improvements and public-safety facilities, creating a direct link between the city’s credit standing and the cost of delivering already authorized infrastructure.
General-obligation bonds are backed by a government’s pledge to repay debt with legally available resources, including tax revenue. An issuer credit rating is broader: it reflects S&P’s view of the city’s overall creditworthiness rather than only one security.
What comes next
The rating will matter most when Surprise next enters the bond market or refinances eligible debt. The final borrowing cost will be set at the time of sale.
The city’s Oct. 1 rating announcement did not identify a new bond amount or sale date. Future offering documents should show which projects are financed, the repayment schedule and the interest rates investors require under the new rating.
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