Charles County will issue $47 million general obligation bonds on March 25, including $27 million of tax-exempt bonds and $20 million of taxable debt.
Proceeds from the tax-exempt bonds will be used to fund various capital projects. Proceeds from the taxable offering will be used to finance the construction of a stadium complex and a new road project, which will be repaid by a local developer, American Community Properties Trust, under an agreement with the county.
Fitch Ratings assigned the deal a AA-plus rating with a stable outlook and Moody’s Investors Service assigned a Aa2. Standard &Poor’s has not yet rated the deal, but last assigned the county a AA with a stable outlook.
In a report released last week, Fitch said its rating “reflects Charles County’s strong financial performance and moderately low debt burden guided by sound fiscal policies and prudent management.”
“Though the tax base remains predominantly residential, the county’s location within the Washington, D.C., metropolitan area has allowed for strong population and tax base growth, which is projected to result in further diversification,” Fitch said. “The county’s largest employer, the Indian Head Naval Surface Warfare Center, is also experiencing ancillary private investment which, together with a rigorous county road infrastructure program and other commercial growth, should bode well for greater economic diversification over the long term.”
Fitch also noted the county’s strong financial management.
“County fund balances have been consistently strong, exceeding the policy goal of 8% of operating revenue since at least fiscal 1997,” the agency said. “The county has additional financial flexibility given their capacity to raise the income tax from 2.9% to the maximum 3.2%, as well as the ability to raise the homestead tax credit from 7% to 10%. Fitch expects that conservative budgeting practices and strong financial management will continue to produce stable operating results.”
