Kamenetz Announces Triple Triple-A Bond Ratings
Highest Possible Ratings Save Taxpayers Millions
Towson, Maryland (February 6, 2014) – Baltimore County Executive Kevin Kamenetz announced today that Baltimore County has once again earned a triple-A bond rating from each of the three major rating agencies on Wall Street – Fitch Ratings, Standard and Poor's, and Moody's Investors Service. The triple-A rating is the highest rating awarded by all three main rating agencies, and fewer than one percent of the counties in the United States earn this prestigious recognition.
"After reading the most recent rating agency reports, I wish to express my grateful admiration of our fiscal team for the solid work behind these superior ratings," said County Executive Kevin Kamenetz. "The expert management and financial discipline associated with our budgetary practices are exemplary, and these top bond ratings mean that we are able to spend much less in interest payments and invest those dollars where they belong – modernizing our aging schools, investing in public safety and rebuilding our aging infrastructure."
Rating Agencies Statements
Fitch made the following statement in its report: Prudent management decisions and adherence to fiscal policies has helped maintain solid reserve levels. The report also highlighted the County's "considerable economic base, favorable debt position and strong overall credit characteristics."
Standard and Poor's wrote: We view the county's management conditions as very strong, with strong financial practices combined with a consistent ability to maintain balanced budgets.
Moody's stated: The Aaa rating and stable outlook reflects the county's regionally significant and diverse economic and employment base, a healthy financial position supported by conservative fiscal management and satisfactory reserve levels, and above-average, but manageable debt burden. Moody's went on to cite a "sizeable and economically diverse tax base, healthy reserve levels," and the county's history of "conservative management that maintains comprehensive fiscal policies" as key factors in their continuing the county's top rating.
Triple-A Bond Rating
A bond rating of triple-A means that a rating agency recognizes Baltimore County's credit worthiness and as a result, when the County sells its municipal bonds it saves millions of dollars of the interest rate payments on the bonds.
Just last Thursday, these triple-A bond ratings brought clear benefits as Baltimore County issued $430 million in triple-A rated bonds and bond anticipation notes with very favorable interest rates. The County sold:
- $200 million in general obligation bonds consisting of $140 million Consolidated Public Improvement (CPI) 20-year serial bonds and $60 million Metropolitan District (Metro) 30-year serial bonds;
- $200 million of general obligation Bond Anticipation Notes due 2/25/15 (BANs);
- $30.3 million in general obligation Metropolitan District Refunding 20-year serial bonds.
The BANs were rated F1+ by Fitch, MIG 1 by Moody's and SP-1+ by Standard and Poor's (the highest ratings given by the rating agencies). The County's Bonds and BANs were well received by the market. The CPI Bonds sold at a rate of 3.04 percent, the Metro Bonds sold at a rate of 3.54 percent and the BANs sold at a historically low rate of 0.13 percent. The Metro Refunding Bonds sold at a rate of 3.05 percent, saving the County more than $4 million in debt service payments over the life of the bonds. In addition, the difference between a double-A and triple-A rating represents savings for Baltimore County for this bond sale of over $6 million.
County Council Chair Cathy Bevins said, "I congratulate County Executive Kamenetz and his administration for this achievement which is a clear reflection of their excellent fiscal management which results in real savings in the financing of critical infrastructure improvements and projects that benefit our communities."
Bond Announcement Follows Significant Drop in County Unemployment Rate
Earlier this week, Baltimore County announced that its unemployment rate dipped to 5.9 percent in December 2013, the first time the rate posted below six percent in five years. The County's unemployment rate is now lower than the Maryland (6.1 percent) and United States (6.7 percent) rates, according to the Maryland Department of Labor, Licensing and Regulation.
"We are working hard on all fronts to turn the corner and climb out of one of the most challenging economic downturns in our nation's history," concluded Kamenetz. "We still have work to do, and we will continue the sound fiscal policies that are the bedrock of everything we do in Baltimore County."