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Atlantic City is on an upswing, but it is still not worthy of investment dollars. According to Moody’s Investors Service, the gambling resort town is still classified in a ranking that sits below “investment grade.” Moody’s recently raised Atlantic City’s credit rating from Caa3 up to B2.
The investment service defines the ranking of B2 as “speculative” and says it is still a high credit risk. Atlantic City’s previous rating, Caa3, is significantly worse. It indicates a property that is poor quality and poses a high credit risk.
Although Atlantic City still falls below investment grade, the upgrade is good news for the city. Moody’s said the change was made as a reflection of growth in the state’s gaming industry. It followed the introduction of two new casino resorts over the summer as well as the city’s recent tax dispute settlements.
Overall, Moody’s declared Atlantic City to have a positive outlook. It said the city shows signs of material progress and budgetary improvements. Meanwhile, Atlantic City is still under the control of the state. New Jersey Governor Phil Murphy promised to send control back to city officials during his campaign but has since expressed concerns that the city is still in need of guidance.
Moody’s says the future could be even brighter for Atlantic City if it can continue reducing its expenditures and diversify its economic base. The investment service predicted another upgrade could be on the way if Atlantic City can swing a material improvement in its tax base and raise income for residents.