Press Release|Public Finance
KBRA Affirms AA Rating on City of Birmingham, AL General Obligation Bonds and General Obligation Warrants; Outlook is Stable
19 Oct 2026 | New York
KBRA affirms the long-term rating of AA with a Stable Outlook on the City of Birmingham's outstanding General Obligation Bonds and General Obligation Warrants.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- Financial management policies and procedures are robust and statutorily required by City Charter.
- Strong liquidity and fiscal flexibility are provided through a large and growing unassigned general fund balance, as well as additional governmental fund reserves.
- Birmingham is the main economic driver within the Birmingham-Hoover MSA and the State, with potential for further economic growth.
Credit Challenges
- Dependence on economically sensitive business tax revenues for the vast majority of general fund revenues.
- Sizable net pension liability and low, but improving, pension funded ratios.
- Addressing pension liability may contribute to elevated fixed costs over the medium term, crowding out other expenditures, particularly in a recessionary environment.
Rating Sensitivities
For Upgrade
- A sustained trend of improved pension funding ratios.
- Continued economic development, coupled with stable and/or growing population and wealth levels.
For Downgrade
- Sustained deterioration in pension funding levels.
- An erosion in the economic base that exacerbates revenue volatility.
- Unreplenished draws on the City’s unassigned fund balance in excess of policy limits.
To access ratings and relevant documents, click here.