There are over 3,100 counties in the United States of America, but only a small portion of them have a AAA bond rating from all three major rating agencies – Standard & Poor’s, Moody’s and Fitch Ratings.
Guilford County is one of those counties and, when its credit comes up for review once again, county officials are hoping to keep those perfect scores because they will translate directly into saving money when the county issues new bonds – as it’s getting ready to do next month.
Guilford County voters approved a $1.7 billion school bond referendum in the 2022 election, right after approving a $300 million school bond referendum in 2020. The county has issued $120 million of the 2020 bonds and put some of that money to work building and repairing schools. In February, the county plans to issue the remaining $180 million from that first bond referendum in 2020.
When the rating agencies rate those soon to be issued bonds, the higher the rating, the less interest the county will have to pay out over the 20 year life of the bonds.
If a person has a slightly lower credit score when buying a new car, that might not mean shelling out a lot of extra money. However, Guilford County is planning to raise another $1.7 billion in the coming years for Guilford County Schools’ projects. So even a slight drop in the county’s assessed credit worthiness by one of the three rating agencies could mean a great deal of extra money must be paid back by county taxpayers.
Guilford County Manager Mike Halford said it’s his understanding that there are only about 50 counties across the country with perfect credit ratings from all three agencies, and he said a surprisingly large percentage of those are in North Carolina.
“I think one reason for that is the North Carolina Local Government Commission,” Halford said.
The commission – better known by county officials as the “LGC” –is a state government oversight commission designed to, among other things, keep local governments in the state from taking on more debt than they can handle.