Albemarle County continues to be a member of an elite group of triple-AAA rated counties nationwide from Fitch Ratings, Moody’s Investors Service, and S&P Global Ratings following a comprehensive review and analyses by these three major credit rating agencies. All three agencies noted the county’s strong financial management, vibrant and diverse economy, and low debt burden among the factors considered in assessing the County’s credit worthiness.
The County received the highest ratings possible for the General Obligation bonds that voters overwhelmingly approved in November for school projects, and the second highest possible rating, commonly referred to as “one notch off AAA” on its lease revenue bonds issued through the County’s Economic Development Authority for government projects and certain other school projects.
“The County is very gratified to see its financial management practices and overall economic conditions receive such a glowing and positive endorsement from three internationally recognized credit rating agencies,” said Interim County Executive Doug Walker. “This strong credit rating will result in significant benefits to the community both in the short and longer term.”
AAA credit ratings benefit County residents and property owners most notably by providing Albemarle with a lower cost of borrowing, that is, less interest costs, to finance county capital projects. The ratings also indicate the type of well-managed fiscal environment that makes the county attractive to businesses and signals a sound and stable long-term economic climate that protects and enhances residents’ commercial and property investments.
In assigning its AAA bond rating, Fitch analysts noted the County’s rating “reflect its notable financial flexibility and low debt levels,” among its key attributes.
Moody’s evaluation cited the County’s “…a vibrant economy boosted by the presence of UVA” and “sound financial condition supported by prudent management.”
S&P’s report indicated the ratings reflect “…very strong economy…very strong management…strong budgetary performance…and well-adhered to fiscal policies…”
The true interest cost (TIC) from sale of Lease Revenue Bonds was 2.94% and General Obligation bonds had a TIC of 2.87%. Both of these rates were less than the County’s projections, providing very positive budget impacts for the County.
“In addition to the strong ratings, the County’s two bond sales benefited from a slim calendar of new bond offerings as well as interest rates which fell over the two sale dates. Also of note, the County’s bonds received very strong interest from investment banking firms who purchase tax-exempt issues”, said Courtney Rogers, Senior Vice President of Davenport & Company, the County’s financial advisors.
“In particular, the introduction of the County’s first General Obligation Bonds in over 25+ years to the market were particularly well received by investors with nine investment banking firms submitting bids. The strong demand and results serve to confirm that the County’s AAA issuer rating from all three national credit agencies are well respected by major investors.”