Atlantic County Rising

Standard & Poor’s last week upgraded Atlantic County to AA from AA-minus ahead of a $21.8 million bond sale set for tomorrow.

The rating agency cited a large and growing tax base, solid financials, and modest debt burden for the new AA rating.

“The upgrade reflects the county’s steady and diversifying economic growth driven by residential development, and its strong financial position,” Standard & Poor’s credit analyst Armen Hratchian said in a press release.

Moody’s Investors Service rates the credit Aa3.

The county has $154 million of outstanding debt, including $82.2 million of general obligation debt and $71 million of appropriation bonds.

Atlantic City lies within the county and the gambling destination generates revenue for the county government. Currently seven major hotel developments are underway, including a $400 million, 800-room expansion at the Borgata Hotel and Casino that will be completed in late 2008 or early 2009.

“Much of Atlantic County’s growth can be attributed to Atlantic City and the casino industry,” according to the preliminary official statement. “Recent casino reinvestment and local area development has assured the future of Atlantic County in both consumer and tourist markets.”

The bonds will be sold competitively. Phoenix Advisors LLC is the financial adviser and Hawkins, Delafield & Wood LLP is bond counsel.

The transaction will offer serial bonds with maturities from 2009 through 2023. Of the total, $17.2 million are GOs that will finance construction and upgrades of municipal buildings and other various capital projects, along with improvements to Atlantic Cape Community College. The remaining $4.5 million are state aid county college bonds and will also support capital projects at the school. New Jersey allocates funds to pay yearly debt service costs on the bonds, subject to annual appropriations.

Atlantic County had a 2007 population estimated at 270,644, up from 252,552 in 2000, according to U.S. census data.

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