Pierce County received a credit rating upgrade from Moody’s Investors Service (Moody’s) thanks to strong fiscal management by County leadership. The rating upgrade from Aa3 to Aa2 is expected to help the County obtain lower interest rates in upcoming revenue bond sales.
Moody’s stated that the positive outlook assigned to the County’s general obligation bond rating reflects their view of the County’s credit quality, including:
- Strong and growing fund balances;
- Very low debt;
- Improving debt service coverage by net system revenues;
- Large and diverse tax base; and
- A strong management team that has implemented new policies.
Moody’s raised its revenue bond rating for the County based on a credit review of the County’s upcoming issuance of Sewer Revenue Refunding Bonds. Upon reviewing the County’s upcoming Limited Tax General Obligation (LTGO) Refunding Bonds, Moody’s assigned its Aa1 rating and changed the rating outlook from stable to positive.
This is the second significant rating upgrade for Pierce County in recent history. In 2019, S&P Global Ratings (S&P) upgraded the County’s general obligation bond rating from AA from AA+. S&P recently assigned an AA+ to the upcoming LTGO bonds and an AA to the upcoming sewer revenue bonds. The S&P AA is equivalent to the Moody’s Aa2, so the Moody’s upgrade brings both major rating agencies into agreement on the County’s revenue bond credit quality.
This positive outlook means that Moody’s expects that it may upgrade the general obligation rating over the next two years, particularly if the County maintains its strong financial position despite economic headwinds related to the pandemic.
The rating upgrade and positive outlook are expected to help the County obtain lower interest rates in its sale of sewer revenue refunding bonds and general obligation refunding bonds on October 8th. D.A. Davidson & Co. of Seattle is serving as the County’s Financial Advisor on the bond sale. RBC Capital Markets will serve as bond underwriter.
County leadership believes its improved financial position not only applies to the County’s ability to meet its long-term financial obligations, but also reflects its credit quality as a partner in economic development initiatives.
Erin Babbo, communications manager