May 16, 2011
King County credit ratings reaffirmed
All three rating agencies give high marks, cite management policies, in latest reports
King County has again received high marks from the Big Three global credit rating agencies. Fitch Ratings, Moody's, and Standard & Poor's all reaffirmed top credit ratings for the county despite the lingering effects of the Great Recession. The agencies noted King County's proactive financial management, diverse economic base, and moderate debt levels as factors in the ratings.
In its report, Fitch Ratings gave King County government an F1+ (the highest rating possible) for short-term debt, and a AAA rating (the highest possible) for the county's long-term unlimited tax general obligation (UTGO) bonds. The assessments from Moody's and Standard & Poor's echoed Fitch.
"These strong credit ratings reinforce that we are taking the right steps to create fiscal sustainability," said County Executive Dow Constantine. "The people of King County can continue to have confidence that our projects are being delivered with the lowest financing rate possible."
High credit ratings allow the county to borrow money for projects at a lower cost to taxpayers. By achieving the highest credit rating, King County will be able to obtain an interest rate on its long-term borrowings of at least 0.20 percent less than comparable government borrowers with a credit rating just one category lower, and .80 percent lower for borrowers with a credit rating two levels below King County's.
"The county's excellent management is evidenced by its adherence to strong, council-adopted financial management policies," Fitch noted in its report. However, the agency also remarked that while King County continues to address structural budgetary gaps, "permanent solutions are still needed to close [them] fully."
The ratings were affirmed as King County prepares for the expected competitive sale of $83.5 million in bond anticipation notes (BANs) on May 23. The BANs will be used to provide interim financing for a countywide project that is already underway to transform and unify financial, human resources, and budget systems.