Fitch and Moody’s Upgrade Washington County’s Bond Rating

As Washington County prepares for a bond sale issuance on May 12, Fitch Ratings and Moody’s Investor Service have upgraded the county’s bond rating for the General Obligation bonds.

As reported by the Hagerstown Herald-Mail,

Fitch has upgraded the county from AA to AA+ for general obligation, or GO, public-improvement bonds, while Moody’s boosted the county’s Aa2 rating to an Aa1 for GO bonds, as well as consolidated public-improvement refunding bonds, according to a county news release.

The upgraded ratings allow the county to borrow money at lower interest rates, as well as refinance previous bond issues and outstanding debt at lower interest rates, saving county taxpayers money in the process, County Administrator Gregory B. Murray said.

…A summary from Moody’s stated that its upgrade “reflects the county’s ability to maintain its solid financial position, supported by strong fiscal policies and practices and healthy reserve levels, even in spite of recent tax base declines and increased funding for pensions.”

An article in the Business Wire, highlights the key rating drivers for FItch. A few are listed below.

STRONG FINANCIAL PROFILE: The rating upgrade reflects the county’s strong financial profile including revenue and spending flexibility as well as robust reserves in and outside of the general fund.

ADEQUATE ECONOMIC BASE: Employment opportunities are sufficiently diverse but are generally focused in lower-wage sectors including manufacturing, distribution, retail, and government. The county’s unemployment rate is slightly elevated and remains above the state and national averages. Wealth indicators are below state and on par with national averages.

FAVORABLE DEBT POSITION: Overall debt levels are low, amortization of principal is rapid, and county officials prudently analyze capital needs in the context of debt affordability guidelines.

AFFORDABLE OTHER LONG-TERM LIABILITIES: The county’s unfunded pension liability is low and should improve as the county moves to fully funding its actuarially required contribution (ARC) in fiscal 2015 and beyond. The county’s full funding of its OPEB ARC is a credit positive.

More information from the Fitch analysis can be found in the article.