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S & P Global Rating - Sussex County, NJ

Release Date: June 21, 2019
On Monday, May 20 Sussex County staff and professionals had a ratings call with S&P Global Ratings for the upcoming sale of $27M of general obligation bonds and $14M of Bond Anticipation Notes.

"S&P Global Ratings assigned its 'AA+' long-term rating to Sussex County, N.J.'s series 2019 general obligation (GO) bonds. At the same time, S&P Global Ratings affirmed its 'AA+' rating on the county's GO debt outstanding as well as its 'AA+' rating on Sussex County Municipal Utility Authority's (SCMUA) wastewater facilities revenue refunding bonds, supported by and based on Sussex County's unlimited GO pledge. The outlook on all long-term ratings is stable.

In addition, we assigned our 'SP-1+' short-term rating to the county's 2019 bond anticipation notes (BAN), due June 19, 2020."

From S&P Global's website, "An obligation rated 'AA' differs from the highest-rated obligations only to a small degree. The obligor's capacity to meet its financial commitments on the obligation is very strong," and "SP-1 [indicates a] Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation."

Of particular note from the S&P Global Ratings Report:

The 'AA+' long-term rating reflects our opinion of the county's:

  • Very strong economy, with access to a broad and diverse metropolitan statistical area (MSA);
  • Strong management, with good financial policies and practices under our Financial Management Assessment (FMA) methodology;
  • Strong budgetary performance, with operating surpluses in the general fund and at the total governmental fund level in fiscal 2017;
  • Very strong budgetary flexibility, with an available fund balance in fiscal 2017 of 22% of operating expenditures;
  • Very strong liquidity, with total government available cash at 32.0% of total governmental fund expenditures and 2.1x governmental debt service, and access to external liquidity we consider strong.

In addition, "We revised our view of the county's financial policies and practices under our FMA to good from standard (emphasis added). The county budgets conservatively and incorporates a five-year historical trend when making its assumptions. Furthermore, management monitors the budget frequently and provides monthly budget-to-actual reports to freeholders. Investment management adheres to the guidelines established as part of the county's cash management plan, providing monthly monitoring and reporting of holdings and performance to freeholders."

Thanks to Chief Financial Officer Elke Yetter, Auditors Ray Sarinelli, Ray Sarinelli, Jr., Financial Advisors Anthony Inverso, Bryan Morris, and Bond Counsel John Cantalupo for their hard work in securing such a favorable outcome for Sussex County.