For the 20th year in a row, all three credit ratings agencies have reaffirmed Arlington County’s debt ratings of Aaa/AAA/AAA -– the highest possible rating. Arlington is one of just 48 counties in the United States, and one of nine in Virginia, to receive this designation.
“As Arlington weathers the impacts of the COVID-19 pandemic, maintaining the triple-Aaa rating is critical to the County’s ability to provide the services and programs that Arlingtonians need,” said Arlington County Manager Mark Schwartz. “Holding the highest rating allows Arlington to continue financing and refinancing capital projects at the lowest possible cost.”
The three major bond rating agencies confirmed their ratings in early October. The bond ratings are based on Arlington’s economic base, financial and overall management, debt burden and ability to pay back bonds through taxes and revenues.
- Moody’s noted the County’s “sound financial operations supported by conservative fiscal management.”
- Fitch Ratings stated “Arlington County’s dynamic economic base, coupled with a strong revenue framework, solid expenditure flexibility, conservative budgeting and close monitoring of expenditures underpin favorable financial results and support Fitch’s expectation of resilient operations through the current recession and future economic downturns.”
- Standard & Poor’s acknowledged that the County’s “very strong debt and contingent liability profile, including very well-funded pension and other post-employment benefits (OPEB) plans, is a credit strength.”
The triple-Aaa ratings allowed the County to take advantage of the historic drop in interest rates and refinanced more than $238 million of existing general obligation (GO) bonds and Industrial Development Authority (IDA) debt—saving more than $22.6 million in interest that will be spread over the next 13-15 years. The savings will be shared between County funds and Arlington Public Schools.
Over the past decade, the County has saved taxpayers more than $55 million through the refunding of GO bonds at lower interest rates.
This month, the County also issued $166 million of general obligation bonds for FY 2021 County and APS projects. The bonds were issued in a competitive sale, with the lowest bid coming in at an interest rate of 1.8%. This is lowest recorded rate for a County issuance of general obligation bonds for new projects.
Additionally, a total of $14 million in IDA revenue bonds were issued for the County’s FY 2021 short-term capital needs at an interest rate of 0.42%.
These actions were approved at the September 15 County Board meeting.