PHILADELPHIA The bond rating agency Standard & Poor's on Monday raised Philadelphia's rating two notches to A-plus, the highest ever received by the city.

It was the third time in 21/2 years that Standard & Poor's had upgraded the rating on the city's general obligation bonds.

Mayor Nutter said in a statement that he was "very proud" of the upgrade, which he said reflects "the city's strong financial management practices" and the "diligent work" of the administration's finance team.

The higher bond rating, he also noted, means the city can borrow money at a lower interest rate, saving money.

In June, the rating agency raised Philadelphia's bond rating to A-minus, the first time in more than 30 years that the city had been rated in the A category by all three major rating agencies. In 1990, the city's bonds were considered speculative investments.

The latest jump comes as Standard & Poor's has been applying new standards and methods for rating municipal bond issuers.

The agency predicted that about 30 percent of its ratings would increase and 10 percent would drop as a result of the changes. The rest of the ratings will remain the same, unaffected by the new standards, the agency said.

Ratings were raised for a number of other Pennsylvania locations Monday - Castle Shannon Borough in Western Pennsylvania also received a two-notch increase.

In a report last week, Standard & Poor's also predicted that "local government credit quality should continue to strengthen in 2014 as housing market gains gradually become reflected in their finances."

City Treasurer Nancy Winkler said the administration had "worked hard to stabilize the city's finances" and withstand financial challenges.

She said work remained to better fund the municipal pension system and increase its fund balance.