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Posted on: May 19, 2021

Town Receives Highest Possible Bond Rating

AAA bond rating graphic

The Town of Holly Springs has received its highest-ever bond rating, the highest possible from a rating agency.

The Town was given a AAA rating on general obligation transportation and parks bonds that will be sold next month, ensuring significant savings on borrowing costs and reflecting the strength of the Town’s financial position. 

The AAA rating, the highest possible, was awarded by rating agency Standard & Poor’s. In addition, Moody’s upgraded the Town’s general obligation bond rating to Aa1 from Aa2.  

“This is very exciting news for the Town, for which we all should be incredibly proud,” said Finance Director Antwan Morrison. “It is a testament to the hard work, commitment, and planning of both current and previous Town Councils and staff members.” 

The rating applies specifically to $23 million in 2018 transportation bonds and $8 million in 2011 parks and recreation bonds authorized by Town voters. However, Morrison said the higher bond ratings should also help save money on other borrowing as well. 

“It’s going to help us get a better interest rate,” he said, comparing the rating to an individual’s credit report. The savings on borrowing will mean additional money available for other needs. 

As of October 2019, only 18 of the state’s 552 municipalities had a AAA rating from S&P. 

 “It’s very difficult for an organization of our scale to get that,” Morrison said, noting that larger cities typically are more able to achieve AAA. “That’s why it’s such a big deal to have received it.” 

 S&P’s AAA rating reflects its view of the following Town characteristics: 

  • Very strong economy 
  • Strong management, with good financial policies and practices
  • Strong budgetary performance 
  • Very strong budgetary flexibility 
  • Very strong liquidity  

Morrison said the Town has continued to strengthen management practices and policies under the leadership of Town Manager Randy Harrington. 

“These factors, coupled with the significant residential and commercial growth in the area, conservative fiscal planning, and a constant eye on the Town's future, have allowed us to accomplish such a significant achievement,” he added. 

S&P characterized the Town’s financial outlook as stable, adding that management of its debt profile and strong, growing economy provide additional rating stability. 

“Management uses conservative budgeting assumptions that review five-year historical trends to formulate the upcoming year’s revenue and expenditure forecast,” S&P said. “The budget is regularly monitored with monthly reports provided to elected officials.” 

Moody’s cited Holly Springs’ strong tax base and economy. Wealth levels are strong, and the tax base continues to exhibit above average growth. 

The $31 million bond sale is scheduled for June 1. Nearly half of the money will go toward widening Holly Springs Road from Flint Point Lane to Holly Springs Road. Construction is scheduled to start late this summer. Other road projects receiving the bond money include:

Parks bond projects include Arbor Creek-Middle Creek Greenway and initial development of Town parkland on Cass Holt Road. 

For more information, contact Finance Director Antwan Morrison at (919) 557-3912 or antwan.morrison@hollyspringsnc.gov.

 

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