County sees bond rating upgraded to A3
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Moody’s upgraded the county’s bond rating from “Baa1” to “A3” with a stable outlook.
“The upgrade to A3 is based on the satisfactory financial operations supported by healthy reserves, growth in the county’s moderately sized agricultural tax base, and manageable debt position,” the company said.
The study was generated as a result of the county’s application for a $6.5 million bond to finance the new Centertown School project.
Joe Ayres, managing director of Cumberland Securities/Morgan Keegan, which serves as the county’s investment banker, said the upgrade is an important advance for the county.
“The upgrade of Warren County’s bond rating to A3 puts the county in a new league as it relates to investors both state-wide and throughout the country,” Ayres said. “Being an A category credit expands the number and type of investors willing to invest in the county’s bonds and ultimately results in lower interest rates and therefore significant savings for the taxpayers of the county.
“Moody’s was especially impressed with the fiscal discipline exercised by the county in building debt service fund balances and maintaining below average debt burdens, even when factoring the new school building program,” Ayres added.
County Executive Kenneth Rogers said he is pleased with the good report from Moody’s, noting in the cost of bond insurance alone the county saved $12,000 as a result of the upgrade.
“The upgrade of our bond rating is a significant milestone for Warren County,” Rogers said, “especially during a period of time where we are financing a major new capital project. Moody’s told us they were impressed with the county’s increasing property values and our diversifying economy. Additionally, Moody’s believes the county’s financial position will remain stable.”
Despite the closing of several major industrial plants over the past couple of decades, Scott P. Gipson, vice president of Cumberland Securities/Morgan Keegan, said Moody’s found the county to have a healthy economy, noting that efforts to diversify its employment base by supporting local industry, as well as working to bring in smaller industrial concerns from outside the county, played a part.
“We talked specifically about some of the job losses in the county and how the county has gone back out and replaced those jobs,” Gipson said. “Maybe not by replacing them with a new 1,000-person employer, but 50 jobs here, 20 jobs there, and it’s added up over the last few years to a fairly substantial number.”
Gipson said the county’s fiscal responsibility, including recently paying off some notes early, also impressed Moody’s and played a part in the improved rating.
“The county has, over the last several years, shown a good trend in managing their funds,” Gipson said. “Debt service fund balance has been maintained at a good level. The sales tax revenues now coming in from the voter supported increase helps on the revenue side. The county has continued to grow. You have more people here now, you have a higher tax base, the assessed value of the county continues to grow each and every year, so with all those factors coming together, Moody’s looked at it and said, ‘We think the county is in the A category now.'”