Standard & Poor's Ratings Services said it raised its underlying rating on Franklin County, Iowa's general obligation bonds to AA-minus from A-plus.
The outlook is stable.
"The higher rating reflects the county's improving reserves," said Standard & Poor's credit analyst Alexander Laufer.
An annual ad valorem tax levied against all taxable property in the county secures the bonds.
"The rating reflects our assessment of the county's very strong budgetary flexibility and liquidity," said Laufer.
"The stable outlook reflects our expectation that Franklin County will maintain very strong budgetary flexibility and a strong debt profile," he added. The agency also believes rapid debt amortization will allow the county's debt burden to remain strong.
Standard & Poor's could raise the rating if the county's economy continues to expand and diversify the tax base with higher incomes and wealth, although this is unlikely to happen within the two-year outlook period. Conversely, deterioration of the county's financial metrics or a significant increase in debt could lead to a lowering of the rating.
