Fitch Upgrades Cherokee Nation's Rating
The Cherokee Nation’s credit rating has been upgraded to “BBB” from “BBB-”by Fitch Ratings Inc., one of the top three global rating agencies, for continuing to show strong financial operations.
Currently, the Cherokee Nation maintains a $586.6 million operating budget and $98.9 million capital outlay budget. More than 60 percent of operating revenue comes from federal sources.
“Cherokee Nation’s Fitch rating increase is clear validation of our continued success at fiscal management. I commend Cherokee Nation Treasurer Lacey Horn, Cherokee Nation Businesses Chief Financial Officer Doug Evans, and their staffs for their due diligence in ensuring the tribe remains operationally sound,” said Cherokee Nation Principal Chief Bill John Baker.
Each year the Cherokee Nation is required to have an independent rating analyst review its financial statements, spending trends, debt and future outlook after the tribe issued tax exempt bonds in 2006 to construct Three Rivers Health Center in Muskogee, Nowata Health Center and Redbird Smith annex in Sallisaw. This is the Cherokee Nation’s first rating upgrade.
“A good bond rating means that the Cherokee Nation is a good investment - that we pay our debt and pay on time,” said Cherokee Nation Treasurer Lacey Horn. “If we should ever need to issue bonds in the future, we could do so at a low interest rate. A bond rating upgrade reaffirms that we continue to be good stewards of tribal dollars for our Cherokee citizens.”
Fitch issues credit ratings that range from the highest AAA to lowest D.
In a statement Fitch said the Cherokee Nation’s rating upgrade was based on several key drivers including its general fund cushion which has allowed the tribe to enhance tribal services.
“The upgrade reflects the continued strong performance of the (Cherokee) Nation’s operations, including both its casino gaming enterprise and health system,” the Fitch statement said. “CNB maintains a competitive position in the Oklahoma market. The continued growth in the pledged third-party health care revenues has also led to positive operating margins and ample debt service coverage on the bonds.”
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