Isle of Wight County, situated in the Hampton Roads region of southeast Virginia, will bring $24 million of general obligation public improvement bonds to market in a negotiated sale today after grabbing a rating upgrade.
Standard & Poor’s raised its rating to AA-minus from A-plus, reflecting the “county’s tax base, which has grown substantially in recent years, combined with conservative financial practices.”
Fitch Ratings gives the Series 2008B bonds an AA-minus with a stable outlook.
The growing county, with a population of 34,057, will use bond proceeds for construction related to public safety facilities and land acquisition projects.
Both Fitch and Standard & Poor’s affirmed the county’s $91.6 million of outstanding GO debt at AA-minus.
Standard & Poor’s noted Isle of Wight’s stable local economy, highlighted by low unemployment rates and good income levels, good financial management that has led to a consistently strong and stable financial positions, and a moderate-to-low overall debt burden.
“We expect that the county’s economy and tax base will diversify and expand over time, eventually underlying its financial strength,” Standard & Poor’s analyst Armen Hratchian said in a rating report. “The strength of the county’s credit, in our opinion, will depend on management’s ability to prudently manage its ongoing and future capital needs, specifically infrastructure and schools, which will be required to stimulate long-term economic growth.”
The county’s debt burden is expected to remain moderately low due to limited capital needs, Fitch said. Its capital improvement plan for fiscal 2009 to 2013 is $148 million, although $76 million represents school needs that may be postponed, Fitch said.
Future debt plans for non-school needs include private placements, with a $10 million issue in 2009 and possible out-year issuances totaling $30 million. Operating revenues will fund about $32 million of capital needs, according to Fitch. Isle of Wight County has utilized almost $20 million of pay-as-you-go financing in the past four fiscal years.