New Castle County retains AAA bond ratings
NEW CASTLE – New Castle County recently retained the highest possible bond ratings from the three major agencies ahead of its Sept. 30 sale.
The latest round of rating reviews from Fitch, Moody’s and S&P Global Ratings were largely expected, as the county has strong reserve funds and continued to see growing revenues even through the pandemic.
The ratings are important because higher grades translate into lower interest costs in repayment of the bonds. The agencies look at a variety of criteria, including the county’s economy, government’s financial performance and management, debt load, long-term costs and political structure. Counties that analysts believe could better weather recessions or economic downturns are in turn seen as safer risks and awarded higher ratings.
The county anticipated a sale of $100 million of the county’s general obligation bonds Thursday, which would finance more than 70 different capital projects including a variety of park improvements, including Banning Park and Delcastle Park, as well as the repair, rehabilitation and overall support of the county’s wastewater infrastructure. Additionally, the county will take advantage of low market rates and refund existing bonds for interest savings.
It’s the first bond rating review for the county since 2019, before the pandemic impacted the budgets of many local jurisdictions. Unlike some other municipal governments around the country, New Castle County’s operating budget grew by more than 2.5% in the fiscal year that started July 1, totaling more than $311 million. The county also authorized a $60.3 million capital budget for the fiscal year.
“Being a financial watchdog for New Castle County residents is paramount in my job,” New Castle County Executive Matt Meyer said in a statement announcing the ratings. “Our team works extremely hard in protecting our financial stability, integrity and maintaining a clean bill of health for their government finances.”
All of the agencies noted the county’s growing local economy and sound financial operations along with its significant reserve funds in their explanations of the ratings.
“New Castle County continues to see growth in its local economy as residential and commercial developments remain active. The county’s resident income and wealth indicators are above average. The county’s reserve position remains very healthy and fiscal 2021 preliminary shows another strong year for the county,” Moody’s wrote.