For the 19th year in a row, all three credit ratings agencies have reaffirmed Arlington County’s debt ratings of Aaa/AAA/AAA — the highest rating. Arlington is one of just 48 counties in the United States, and nine in Virginia, to receive the highest rating from all three credit agencies for its bonds.
“The recent steps by the County Board to address the County’s reserves were critical in maintaining a stable outlook to this year’s triple-Aaa rating,” Arlington County Manager Mark Schwartz said. “Staying in this top tier of counties is important and allows Arlington to continue financing critical capital projects at the lowest possible cost.”
Moody’s issued their rating Wed., May 22. Fitch Ratings issued their rating Thu., May 23, and Standard & Poor’s issued theirs on Fri., May 24.
- Fitch noted: “The County demonstrates strong financial management through conservative budgeting, timely tax rate increases, active expenditure management and the maintenance of sizable reserves. Fitch believes the County is well positioned to maintain exceptional financial resilience throughout economic cycles.” Read Fitch’s press release.
- Standard & Poor’s noted: “The ratings reflect our opinion of the County’s strong and balanced historical financial results, supported by an affluent and growing property tax base, in addition to a strong management team that maintains very strong formalized financial policies and practices.”
- Moody’s, while reaffirming their Aaa rating, noted: “Continued use of reserves resulting in a decline in general fund balance or total available reserves below historical levels” are factors that could lead to a downgrade.
Ratings ensure low interest rate for 2019 bond sale
Having the Aaa/AAA/AAA rating ensures that the County will enjoy low interest rates when it sells Series 2019 General Obligation Public Improvement Bonds the week of June 3. The bonds were previously approved by voters to finance capital improvements for parks, government facilities, transportation, Metro and other County Board-approved uses.
UPDATE: The County completed its bond sale on June 4. See note above for more info.
At its May 18 meeting, the County Board authorized the sale of up to $169.5 million in General Obligation Public Improvement Bonds and up to $200 million in bond refunding. The County refunds bonds whenever it can achieve lower interest rates.
Under current market conditions there will not be a refunding, however the authority remains in place through FY 2020 should rates improve and a refunding opportunity exist. In the past eight years, the County has saved taxpayers more than $36 million through refunding bonds at lower interest rates.
About General Obligation Bonds
General Obligation Bonds are debt instruments issued by states and local governments to raise funds for public works. Arlington’s GO bonds are 20-year bonds backed by the County’s full faith and credit. Ratings agencies base their bond ratings on their analysis of the locality’s ability to pay back bonds through taxes and revenues. Learn more about how the County uses bonds.