Page 3 - Moreno Valley 2025 Bonded Debt Summary

BONDED DEBT SUMMARY

PUBLIC BENEFIT OF USING MUNICIPAL DEBT

The municipal debt markets provide a valuable tool for the construction of capital improvement projects. They provide the funding
necessary to build large, high priority capital improvements that benefit the citizens, such as roads and other infrastructure, when
needed rather than waiting until sufficient levels of cash have been built up. The municipal debt market includes fixed-rate bonds,
variable-rate bonds, private placement bonds, bank loans and other similar financing instruments. These municipal financings can be
either tax-exempt or taxable to the bond buyer. Generally, the municipal debt market offers funding on a tax-exempt basis, which
reduces the overall borrowing costs.

The City’s Debt Policy states that “debt will only be used to finance capital projects when it is an appropriate means to achieve an
equitable allocation of costs between current and future beneficiaries as determined by the City Council.”

MORENO VALLEY DEBT PROGRAM
The City has utilized the financial markets to construct various local projects. The following pages summarize the City’s debt portfolios,
as well as important components in the overall management of the portfolio.
DEBT MANAGEMENT POLICY
In compliance with state law and industry best practices, the City has developed and maintains a Debt Management Policy. This
policy directs all aspects of the debt program and is reviewed by the City Council. The Debt Management Policy was last reviewed
on May 20, 2025. The City’s Special District Financing Policy provides guidance on conduit land secured financing. Copies of these
policies are available on the City’s Investor Relations website.
BOND RATING
Bond ratings are designations used by rating agencies to give relative indications of credit quality or risk. Moreno Valley has been rated
“AA stable outlook” by Standard & Poor’s (S&P) since May 2024. A description of S&P’s rating process and what the ratings mean can
be found on their website at the following location: https://www.spglobal.com/ratings/en/about/understanding-credit-ratings.
CONTINUING DISCLOSURE
As a condition of issuing bonds, the City has agreed to provide continuing disclosure to bondholders or lenders. This data consists
of certain financial or demographic data or other material events identified by the Securities and Exchange Commission (SEC). The
City has agreed to these requirements as part of the Continuing Disclosure Agreement for each financing. The data elements
that must be reported are unique to each bond issue and the disclosure reports must be filed within a specified time frame on the
Electronic Municipal Market Access database (EMMA) which is managed by the Municipal Securities Rulemaking Board (MSRB). As
a result of the passage of SB 1029, signed by the governor in 2016, certain data elements are also required to be reported annually
to the California Debt & Investment Advisory Commission (CDIAC). This will also be considered a requirement of the City’s ongoing
continuing disclosure program.

The City is current on all continuing disclosure filings and working with outside third parties to ensure that the filings are complete and
on time. The complete filing history can be found on the EMMA website (https://emma.msrb.org) and the latest filings can be found on
the City’s website on the Investor Relations page. The status of the most recent disclosure filings can be found later in this document.