Rockland County, N.Y. received its first bond upgrade from Standard & Poor's since 2002, and a positive outlook, citing improved liquidity.
S&P raised its underlying rating for Rockland County's outstanding general obligation debt to BBB from BBB-minus on May 15, nearly three years after it had cut the county to one notch above junk level.
The upgrade comes in connection with the county's plans to issue bonds to refund bonds debt issued in 2006 and 2007.
Rockland was among 35 local governments cited in a fiscal stress test list New York State Comptroller Thomas DiNapoli released in September.
"The rating reflects our opinion of the Rockland County's very strong liquidity," said Standard & Poor's credit analyst Timothy Little.
Little said the county still has an operating deficit in its general fund with "weak budgetary flexibility.
"The positive outlook reflects our opinion that there is a greater than one-in-three chance that we will raise the rating within the next year due to continued improved budgetary performance and deficit mitigation," said Little. "However, the rating is capped at the current level as long as the county's available reserves are less than negative 5% of general fund expenditures."
Moody's Investors Service upgraded Rockland's GO bonds to Baa2 from Baa3 in July 2014. The county's budgets have been subjected to mandatory reviews by DiNapoli since 2013 and received a favorable review from the comptroller last November.
"This is tremendous news for Rockland County and one of the strongest validations yet of the progress we have made in stabilizing and restructuring our finances," said Rockland County Executive Ed Day in a statement. "When I took office 16 months ago, our administration faced a $138 million deficit. Since then, we've made the tough decisions to cut government spending, improve management and tighten procurement processes."
Rockland County is about 25 miles north of Manhattan with about 311,000 residents.
