(The Center Square) – Shreveport’s most recent fiscal review by Wall Street firm S&P Global Ratings could secure more favorable borrowing terms as the city tackles escalating costs and a 2026 deadline for EPA-mandated sewer upgrades.
S&P Global upgraded Shreveport’s outlook on Feb. 27 from negative to stable. The firm is one of two major bond rating agencies that issue risk analysis reports around municipal government creditworthiness. The other is Moody’s Ratings.
After issuing a lower outlook three months ago, the agency noted a recent increase in economic activity and better management of the city’s finances. Their previous reports had indicated that if fiscal issues remained unchanged there was a 33% chance that Shreveport could face a lower rating.
Ratings can affect borrowing costs and interest payments for government projects.
Concern focused on reserve funds that were insufficient to absorb budget shocks, along with rising expenses and liabilities related to consent decree obligations.
Shreveport carries a good BBB+ credit rating, a status that indicates the city is capable of meeting financial obligations. The revised shift to a “stable” outlook does not change that credit rating but conveys growing confidence in fiscal management and reduces the likelihood of future downgrades.
There are eight ratings tiers above BBB+ and 13 below. If S&P Global or Moody’s downgrades Shreveport’s credit rating, the city could face higher borrowing costs on future bonds, whereas a stronger rating could save millions over the life of a bond.
“S&P believes that we are trending in the right direction,” said Shreveport Mayor Tom Arceneaux.
He pointed to the city’s commitment to maintain a general fund operating reserve of at least 8% and recent announcements of multibillion-dollar data center investments and other manufacturing expansions. The city’s 2026 operating reserve is $56.7 million, or about 8% of its $709 million budget, according to the city.
Better ratings improve “the city’s ability to support ongoing and future financing needs for infrastructure, services and capital projects,” Arceneaux said.
Shreveport is in the final year of a consent decree with the federal government to fix its failing sewer system. The 12-year plan to address sewer overflows and aging infrastructure carries a November 2026 deadline. City officials hope to get an extension before terms expire, according to a city document.
Three months ago, lingering doubts about the city’s ability to complete the remaining corrective sewer upgrades caused the agency to issue a “negative” outlook. “The costs for the entire program have escalated significantly; originally estimated at $349 million but could now be more than $900 million,” the agency wrote in a November 2025 report.
The city originally issued $195 million worth of revenue bonds following the 2014 consent decree action, and then refinanced $168 million in December 2025, taking advantage of lower rates and saving the city more than $11 million over the life of the bonds. The transaction reduced interest expenses but not the principal or term.
Arceneaux has said the city is currently renegotiating the consent decree’s terms, which mandated sewer system upgrades to comply with the Clean Water Act.