GALVESTON — The City of Galveston has received the highest bond rating in its history, following an upgrade from Fitch Ratings that cited strong financial stability and healthy reserves.

Fitch announced Thursday that Galveston’s rating improved from AA to AA+, one of the highest ratings the credit agency assigns. The new rating is expected to give the city access to lower interest rates when issuing bonds for infrastructure projects, according to a city press release.

“The City Council and staff have worked diligently to strengthen our financial position, prepare responsibly for future challenges, and invest in Galveston’s long-term prosperity,” City Manager Brian Maxwell said in the release. “This rating upgrade by Fitch validates that work and positions us well for our future and upcoming needs.”

Fitch pointed to stabilized pension obligations, increased financial resilience, and a healthy general fund balance as key reasons for the upgrade. The agency noted the rating could be at risk if reserves decline or if long-term liabilities rise significantly.

Galveston’s economy is mostly strengthened by tourism, health care, maritime industries, and the Port of Galveston, which is the nation’s fourth-busiest cruise port. Fitch assigned the city a stable outlook for the future.

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