County maintains AAA bond ratings

Washington County will keep its AAA bond ratings from both Moody’s Investors Services and Standard & Poor’s Rating Services -- the highest rating granted by the credit rating agencies. 

At its Nov. 18 meeting, the Washington County Board of Commissioners approved a refinancing of current county debt issued in 2005 and 2007 to reduce the interest rate and debt service payments.

A press release issued by the county last week said both Moody’s and S&P, in preparation for the bond sale, reviewed the county’s bond rating and reaffirmed the county’s AAA status.

Washington County Deputy Administrator Kevin Corbid said Washington County is part of a small and elite group of counties nationwide that has a AAA rating from both agencies. The county has maintained its AAA bond rating since 2011.

Corbid said the bonds sold in 2005 were $12.4 million and the bonds sold in 2007 were $79.3 million. He said 2005 was a typical bonding year for the county. Bonds issued that year were used to help pay for road improvements. In 2007, the bulk of the bonds sold went toward a considerable expansion of the county’s government center in Stillwater, which includes the new courtroom building.

District 2 County Commissioner Ted Bearth stressed the importance of maintaining the AAA bond rating while campaigning this fall and said he is pleased to see the county receive the perfect rating once again in 2014.

“It’s extremely important. It keeps costs down for residents,” Bearth said. “We’re really glad that both agencies came back and confirmed the AAA rating.”

The refinancing of bonds sold in 2005 and 2007 will reduce the interest rate on those debts to 2.33 percent, which will save the county $3.87 million over the course of the bonds.

Corbid said the county did not refinance the entirety of the over $91 million in bonds issued in those two years. The interest rate on the portion of debt not refinanced was already low at 3.5 percent.

Both Moody’s and S&P assigned an outlook of “stable” to their ratings for the county. The stable designation is an affirmation that both credit agencies expect the county’s strong financial performance to continue, which would make a sustained AAA rating more likely in future years.

In a written statement, Moody’s said the AAA rating “reflects the county’s substantial tax base favorably located in the Twin Cities metropolitan area, sound financial operations that are supported by growing reserves, and slightly above average debt burden with modest future borrowing plans.”

Moody’s also noted Washington County’s diverse mix of industries, and its available land use for future development as signs of the economic strength of the county and the region.

S&P cited “strong budget flexibility and liquidity, and strong management conditions” as rationales for the county’s AAA rating. It also recognized Washington County’s positive budget variances and available budget reserves as additional reasons for the top credit rating.

Joshua Nielsen can be reached at jnielsen@lillienews.com or 651-748-7822.

 

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