BRADENTON, Fla. — Charleston County, S.C., Wednesday received its third gilt-edged rating, this time from Fitch Ratings, which cited the coastal county's strong finances and diversity in job growth despite the recession.
Fitch upgraded the county's general obligation bonds to AAA from AA-plus. The outlook is stable.
The higher rating applies to $37 million of outstanding GO bonds issued in 2004 and $56.86 million of GO transportation sales tax bonds sold in 2006. Fitch has not rated a county GO issue since 2006.
"The upgrade to AAA reflects Charleston County's strong financial management and fiscal discipline, evidenced by its ability to generate favorable operating results during a challenging economic environment, consistent maintenance of reserves above prudent policy levels, and increasing diversification of a stable local economy," Fitch analyst Ginny Glenn said.
The rating upgrade "is great news for Charleston County residents and proof positive that we're doing the right things," County Council chairman Teddie Pryor said. The council set a "conservative, committed long-term fiscal management direction for the county."
"This upgrade ultimately allows Charleston County to save taxpayers money by allowing us to pay lower interest rates on borrowed funds for road construction and other capital projects," he said.
The county will evaluate the rating agencies it will employ the next time debt is issued, said Keith Bustraan, assistant county administrator for finance.
The county's GOs also are rated triple-A by Moody's Investors Service and Standard & Poor's. The outlooks are stable.
Achieving the highest-grade ratings with stable outlooks comes after Moody's confirmation on Aug. 4 of its negative outlook on its Aaa rating of the state of South Carolina due to its indirect links to the U.S. government. Some local government issuers have received negative outlooks due to their connection with the state's credit.
Moody's on Wednesday assigned a Aa1 rating with a negative outlook to the South Carolina Association of Governmental Organization's upcoming sale of $113.3 million of certificates of participation for various school districts. The negative outlook is based on support from the state's school district credit enhancement program.
Charleston County continues to experience job growth at a pace greater than the state and the nation, diversifying employment beyond tourism and the military, the county's traditional job-producing sectors, Glenn said.
"The county continues to maintain a structurally balanced budget with actual results routinely exceeding budget projections, reflective of conservative budgeting practices," Glenn said. "The county routinely prepares multiyear forecasts, which show surplus results continuing through 2016."
Charleston County, along the state's southeastern coast, has 945 square miles and a 97-mile coastline along the Atlantic Ocean. The National Weather Service Thursday issued a tropical storm watch for Charleston, which could experience tropical storm conditions late Friday and Saturday from the passage of Hurricane Irene.
The county has $575 million of outstanding GOs. The county last month sold $167 million of GO transportation bonds and $27.1 million of GO capital improvement bonds rated triple-A by Moody's and Standard & Poor's.
The $167 million tranche of GOs with maturities to 2029 are backed by a sales tax that typically covers debt service. The bonds priced to yield 2.3% with a 5% coupon in 2019, 2.9% with a 5% coupon in 2022, and 3.9% with a 4% coupon in 2029.