Moody’s Investor Service, S&P Global Ratings, and Fitch Ratings assigned ratings of Aa1 (stable outlook), AA+ (stable outlook), and AA+ (negative outlook), respectively, to Maui County’s General Obligation Bonds, Series 2020, Mayor Michael Victorino announced today.
The approximately $71 million series 2020 bonds are due to be sold via negotiation on Sept. 9, 2020. The money will be used for Maui County capital improvement projects and to refund existing bonds for savings.
Aa1/AA+ is the second highest rating a debt issuer can receive. The excellent credit ratings mean Maui County taxpayers could save millions of dollars on interest costs when borrowing money at a low interest rate in the bond market.
The rating agency actions also affirm the Aa1/AA+/AA+ ratings for Maui County’s $249 million outstanding general obligation bonds.
“I want to congratulate and thank Finance Director Scott Teruya and Deputy Director May-Anne Alibin and the dedicated employees in the Department of Finance, Budget Office, and the Department of Management for their hard work and accomplishment for the people of Maui County,” Mayor Victorino said.
Moody’s cites the Aa1 rating “reflects the limited expected volatility of the county’s major revenue stream, property taxes. Moody’s also states: “The stable outlook reflects the revenue structure, primarily property taxes, that support predictable finances and maintenance of sufficient fund balance to support operations.”
In its credit overview, S&P mentions, “we believe that the county is well positioned to weather this period of economic stress.” S&P’s ratings of the County reflect upon very strong budgetary flexibility, very strong liquidity, and strong management with good financial policies and practices.”
On Maui County’s operating performance, Fitch said, “Budget management during the economic expansion was solid, with the county setting aside reserves to address long-term liabilities and emergencies.” Fitch Ratings highlights that its AA+ rating “reflects the county’s typically solid revenues and high independent ability to raise revenues, low long-term liability burden relative to the tax base given a lack of overlapping debt, and robust operating performance.”
All three rating agencies highlighted Maui County’s strong financial management including building up strong reserve levels and proactively addressing long-term liabilities.