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Moody’s, Standard and Poor’s Reaffirm Albemarle’s Aaa Bond Rating

Following recent evaluations and onsite visits, Moody’s and Standards and Poor’s have both reaffirmed Albemarle County’s Aaa/AAA issuer credit ratings, keeping the County among an elite group of less than 90 counties nationwide to achieve and maintain the double Aaa designation even during these challenging economic times.  Eight of those counties are in Virginia, which has a total of 95 counties.

The Aaa bond rating benefits County citizens in a number of ways, including providing Albemarle with a lower cost of borrowing to finance county projects.  The rating 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 reaffirming the AAA bond rating, Standard and Poor’s stated that “the county's financial management is excellent “ and cited the County’s “sound and growing local economy, which continues to experience healthy property tax base growth and employment diversification. What we believe are strong and conservative fiscal policies and a well-seasoned management team have allowed management to maintain, in our opinion, its solid finances and low debt, providing rating stability.”

According to Moodys’ evaluation, “the county's financial operations, characterized by ample reserve levels, will remain strong given conservative management practices and healthy revenue streams.  Moody's expects that the county's economy will continue to develop, adding to its already vibrant and diverse base, and demonstrate resilience in the face of national and statewide economic downturn.”

 “We are very pleased and gratified to have our Aaa/AAA bond ratings reaffirmed by the two rating agencies at a time when we are challenged by reductions in revenue from local and state sources,”  said County Executive Tom Foley in announcing the results of the agencies’ review.  “We appreciate the confidence shown by these two 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 strong bond rating affirmation provided significant savings to the County this week when the County issued lease revenue bonds to finance its capital program.  The County’s financing involved several different pieces.  One portion was funds for new projects, known as new money, while the other portion involved refinancing existing debt.  All of the new debt carries fixed interest rates.  However, the County has the ability to refinance portions of the issue in the future should interest rates be favorable.  With regard to the refinancing,  the County saved $1.3 million versus the most recent estimate shared with the Board of Supervisors of $850,000 in September.  The average interest cost on the new money bonds was 3.1% versus the planning estimate of 4.5%.  This translates into total interest savings of $2.3 million over the life of the bonds.

“We were delighted with the results of the bond sale Tuesday morning”, said Courtney Rogers, Senior Vice President with Davenport & Company LLC as Financial Advisor to the County.  “The County received seven bids for the bonds.  By virtue of the County’s excellent credit ratings we saw the winning bid by Guggenheim Securities, LLC of New York beat out the cover bid by Morgan Stanley & Co. by nearly five basis points.  We would typically expect to see a cover bid of only one or two basis points.  This strong bid speaks to the desirability of these bonds with Albemarle’s name on it.”

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