LOS ANGELES — Orange County, Calif. received a rating boost, as Standard & Poor's upgraded its issuer credit rating one notch to AA-plus from AA.
"The raised ratings are based on the county's improved budgetary flexibility," Standard & Poor's credit analyst Misty Newland said Dec. 28.
Also upgraded were the underlying ratings on Orange County's lease revenue bonds, recovery bonds, and pension obligation bonds, to AA from AA-minus.
The action came ahead of a planned short-term taxable pension obligation bond issuance, to prepay the county's projected unfunded actuarial accrued liability and normal contribution to its retirement System for fiscal 2017 .
Moody's Investors Service revised its outlook on the county's long-term ratings to stable from negative Dec. 17. It assigns Orange County its Aa1 issuer rating, and also rates the county's 1996A pension obligation bonds Aa1. It rates Orange County's COPs and lease-revenue bonds Aa3.
Fitch Ratings assigned an AA/F1-plus rating to the POBs ahead of the sale and maintained a stable outlook.
The county's Board of Supervisors approved the following finance team for the negotiated sale at its Oct. 27 meeting: KNN Public Finance as financial advisor, Orrick, Herrington & Sutcliffe, LLP as bond and disclosure counsel, Stifel, Nicolaus & Co. as senior manager and J.P. Morgan Securities LLC as co-manager.
The county expects to save $21 million by prefunding its 2016-17 payments to the Orange County Employees Retirement System, according to a staff report.
The OCERS board of retirement contemplates the potential savings of prefunding its OCERS contributions and unfunded liability each year. It issued short-term taxable POBs in 2006, 2007, and 2011 through 2015.
The S&P upgrade highlights the distance the county has traveled since its 1994 bankruptcy.
