The Mayor’s Office just announced that the city of San Diego has regained access to Wall Street, a significant milestone that ends the city’s nearly four-year struggle to regain its suspended credit rating.
The announcement that rating agency Standard and Poor’s has lifted its suspension of the city’s credit rating will allow the city to return to public borrowing markets, where loans for vital municipal projects less expensive than the private markets used by the city during its banishment from Wall Street.
Standard and Poor’s suspended the city’s credit rating in fall 2004 after revelations that the city’s financial statements to potential investors contained false and misleading information regarding the true state of the city’s financial health.
Since then, the city’s efforts to return to the bond markets have been consistently stymied, as it struggled to release a set of costly and backlogged audits and independent investigations mandated by its outside auditors and the Securities and Exchange Commission.
In fall 2006, the city settled with the SEC on securities-fraud sanctions. Last month, the SEC charged five former city officials with securities fraud in relation to the financial disclosures.
The news also provides a boost to Mayor Jerry Sanders’ reelection campaign. The mayor campaigned in 2005 on a pledge to restore the city’s standing with Wall Street, but had run into many of the same problems as his predecessors in attempts to complete the audits and investigations.
Now, he will have a powerful new talking point. Sanders has called a press conference for noon to deliver the announcement.
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