The Credit of Municipalities

Municipal work is an interesting business. One factor most likely overlooked is the importance of creditworthiness. A municipality must float bonds to pay for schools, parks, libraries, whatever public facility you can think of. And in these economic times, it is more important than ever to have good credit.

The NY Times reported on Tuesday that, across the board, Moody's is putting a negative outlook on the creditworthiness of ALL local governments. All. Every one.

The good news to this is that just a few weeks ago, Loudoun was reaffirmed as a positive AAA rating from not only Moody's, but the other two credit rating agencies as well. And not only AAA, but with stable outlooks and no downgrade.

Only 23 counties in the country (in the WORLD!) have a "triple AAA" rating (AAA from all three agencies). Amazingly, 15 of them are on the east coast. I'm sure there are some really good counties out there that may have just decided to not get rated by all three agencies - but for purposes of discussion, only 23 have this distinction of triple AAA. It's great to be in elite company. Loudoun just floated $168 million in bonds at an avg rate of 3.67%. That's great news for lending.

Sorry for all the boring stuff - but it's interesting, and we live in interesting times.