One of the nation’s premier credit rating bureaus has reaffirmed Richland County’s top rating status, signaling confidence in the County’s sound financial practices and policies.
Moody’s Investors Service assigned its Aaa rating to the County’s $100 million General Obligation Bonds related to the transportation sales and use tax.
“This is a continuation of good financial news for the County, and taxpayers can feel good about that,” said County Council Chair Paul Livingston, referring to the recognition by the Government Finance Officers Association for the County’s biennial budget and comprehensive annual financial report.
“Receiving a top rating from Moody’s, one of the most authoritative credit rating agencies in the world, shows that Richland County is committed to continually improving its management of public dollars,” County Administrator Leonardo Brown said. “We’re positioning the County to maintain a strong financial standing, especially during these challenging times.”
A good bond rating helps taxpayers’ dollars stretch further because it is less expensive for the County to finance debt obligations. Proceeds from bonds are used to fund various capital projects, such as transportation improvements.
The text of the Moody’s release follows:
Rating Action: Moody's assigns Aaa to Richland County, SC's GO bonds, outlook stable
New York, January 21, 2021 -- Moody's Investors Service has assigned a Aaa rating to Richland County, South Carolina's $100 million General Obligation Bonds (Transportation Sales and Use Tax), Series 2021A. We maintain a Aaa rating on the county's outstanding general obligation (GO) debt. Following the Series 2021A issuance, the county will have approximately $238 million of GO debt rated by Moody's. The outlook is stable.
RATINGS RATIONALE
The Aaa rating reflects the county's very large and growing tax base that benefits from the presence of several major institutions including the state government, flagship campus of the University of South Carolina and Fort Jackson. The rating also incorporates the county's history of maintaining balanced financial operations and healthy reserves. The county's robust tax base, very healthy financial condition and relatively low fixed cost ratio mitigates its slightly above average debt and pension burdens.
RATING OUTLOOK
The stable outlook reflects our expectation that the county's financial position will remain in line with the rating category over the next 12 to 18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING.
- Not applicable
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
- Significant decline in reserves owing to imbalanced operations or one-time uses
- Increase in debt and/or pension burden and their associated fixed costs
LEGAL SECURITY
The county has irrevocably pledged its full faith, credit and taxing power for the repayment of the principal and interest of the Series 2021A general obligation bonds. A share of the county's transportation sales and use tax are also pledged for repayment of the Series 2021A bonds and are expected to be the bonds' primary source of repayment. Should the pledged sales tax revenue be insufficient, the county can levy a dedicated and unlimited property tax to repay the bonds.
USE OF PROCEEDS
The Series 2021A bonds will pay a portion of the principal due on the county's outstanding General Obligation Bond Anticipation Notes, Series 2020. The notes were originally issued to fund transportation-related projects throughout the county.
PROFILE
Richland County encompasses the state capital and provides standard municipal services like public safety, public works, health and social services, and judicial services, among others. The county's major business-type enterprises include a solid waste facility and water and sewer utility. As of 2019, the county's estimated population was 415,759.
METHODOLOGY
The principal methodology used in this rating was US Local Government General Obligation Debt published in July 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1230443. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.
Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.
Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.
##