Worcester County Assigned AA Rating for Upcoming Bond Issuance

As Worcester County prepares for a bond sale issuance on June 16, Fitch Ratings has assigned an AA bond rating for the county’s General Obligation bonds.

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

HISTORICALLY STRONG FISCAL MANAGEMENT: Prudent management decisions and adherence to fiscal policies have yielded solid reserve levels despite revenue declines experienced in recent years. The county also maintains a high level of revenue-raising flexibility.

PERSISTENT DECLINES IN TAXBASE: Taxable values have declined six straight fiscal years leading to a pressured revenue environment. Officials prudently raised property and income tax rates in fiscal 2016 to offset this decline and maintain county services.

MODERATE OVERALL DEBT BURDEN: The county’s overall debt burden is expected to remain moderate, given its manageable capital needs.

CARRYING COSTS ARE LOW: Carrying costs including debt service, pension and other post-employment benefits are low but expected to increase modestly as the county issues additional debt and pension costs rise.

SEASONAL TOURISM-BASED ECONOMY: The tourism sector remains a significant economic driver, vulnerable to economic cycles and contributing to seasonal employment fluctuations, although the county’s reliance on direct tourism-related revenues is modest. The county’s tourism industry has historically demonstrated resilience during periods of economic stress.

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