Moody Rates Aa2 and Fitch Rates AA+
PRINCE FREDERICK, Md. (May 01, 2008) – The Calvert County Board of County Commissioners (BOCC) announced yesterday that Standard & Poor’s (S&P) raised its rating of Calvert County from AA to AA+. In conjunction with the April 22, 2008, bond sale, Calvert County was also rated stable with an AA+ rating by Fitch Ratings and stable with an Aa2 from Moody's Investors Service.
The S&P upgrade reflects the continued economic development occurring within the county coupled with consistently strong financial operations and reserves and historically conservative fiscal policies, which have been well-adhered to, along with ample tax rate flexibility, according to a prepared statement.
Specifically, S&P notes that the AA+ rating reflects the county’s:
-- Expanding local economy;
-- Above-average wealth and income levels, which have been increasing at a faster rate than those of the state and nation;
-- Historically low unemployment;
-- Steady tax base growth, even as the BOCC works to curtail residential growth;
-- Strong financial position, strengthened by solid reserves, good taxing flexibility, sound fiscal policies and conservative management practices; and
-- Low debt burden, with manageable future capital needs guided by debt affordability guidelines.
“The AA+ rating is a significant milestone for Calvert County,” said Wilson H. Parran, BOCC president in a prepared statement. “The advantage of higher rating results in a lower interest rate when we issue bonds, therefore, the county realizes substantial savings in financing costs,” Parran said. “Additionally, bond ratings are one of several criteria used by companies looking to start, expand or relocate their organizations and reflect the credit worthiness of the county. The increase to AA+ by S&P demonstrates Calvert’s financial stability, thus increasing the potential for continued economic growth.”
Fitch noted that Calvert County’s strong fiscal management resulted in robust reserve levels and healthy financial flexibility and that overall debt levels are moderately low, amortization is rapid and the county continues to adhere to prudent debt policies. Fitch also noted improving economic indicators such as positive labor force and employment growth, low unemployment, above-average wealth levels and that sustained tax base and economic growth is anticipated despite economic softening and potential vulnerability from housing market declines.
Moody's expects Calvert County to maintain a solid financial position given the county's proactive financial management, comprehensive fiscal policies and healthy reserve levels. Additionally, Moody’s anticipates continued tax base diversification, given the county's proactive economic development programs targeting expansion of the commercial, industrial, professional business base and tourism.