DATE: Thursday, September 17, 2015
CONTACT: Jody Lewis, Communications Specialist
Phone: (434) 296-5841
County Receives Reaffirmed AAA Ratings from All Three Credit Rating Agencies
Albemarle County continues to be a member of an elite group of counties nationwide after receiving an affirmation of AAA issuer credit ratings from Fitch, Moody’s and Standards & Poor’s following a comprehensive assessment by the rating agencies. All three agencies noted the county’s strong financial management track record, revenue stability, healthy economic profile, and low debt burden in affirming the AAA assignment. In addition to the AAA ratings, each rating agency provided a "stable outlook" indicator, which means, provided the County maintains its solid financial position, sound fiscal practices and its growing tax base over the next several years, there is no reason to believe the rating will be reduced over the near term.
The AAA credit ratings benefit County citizens in a number of ways, including providing Albemarle with a lower cost of borrowing to finance county projects. The ratings also indicates 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 affirming its AAA bond rating, Standard and Poor’s stated that the rating “reflects our view of the County's consistently very strong financial operations with historically very strong budgetary flexibility and liquidity levels, which is supported by very strong management. We believe that the county's strong financial operations will continue.”
Moody’s evaluation cited the County’s “strong financial management marked by healthy reserve levels, a wealthy and vibrant economy boosted by the University of Virginia, and a low debt burden.”
Fitch also noted the County’s healthy economic position, remarking “Anchored by the University of Virginia (UVA) and the U.S. Department of Defense, the county has a very well-educated labor force and economic metrics are strong, including high levels of wealth and consistently low unemployment.”
“We are very pleased and gratified to receive a triple AAA credit rating at a time when we continue to experience some challenges from an uneven national and state economic climate,” said County Executive Tom Foley in announcing the results of the agencies’ review. “We appreciate the confidence shown by these three independent, internationally recognized financial institutions which measured us against the very best communities across the country, and their favorable assessment speaks well of our strong fiscal policies and practices and the overall quality of life we enjoy here in the county. This Board of Supervisors and past Boards have been resolute in instilling a fiscally responsible approach to government and we've had strong and consistent senior management and an outstanding staff that makes these outstanding ratings possible.”
This strong bond rating affirmation provided significant savings to the County this week when the County issued lease revenue bonds to finance a portion of its capital program. Because of being a triple-AAA rated jurisdiction, the County saved between $500,000 and $ 1,000,000 over what the interest cost would be for AA rated counties. The all-in true interest cost on the new money bonds was 2.87% versus the planning estimate of 4.67%, which frees the County to use the resulting debt service savings to bolster the capital program or for other general government purposes.
“The goal was to get into the market ahead of any possible increases in interest rates due to actions the Federal Open Market Committee might make at its meeting later this week, and we were pleased that we had strong bids from seven national investment banking firms with the top two bids separated by only one basis point. This speaks to the very attractive name Albemarle County has in the marketplace,” said Courtney Rogers, Senior Vice President with Davenport & Company LLC as Financial Advisor to the County.