Bangkok--21 Oct--Standard & Poor's
Standard & Poor's Ratings Services raised its underlying rating (SPUR) on Hudson County, N.J.'s general obligation (GO) debt one notch to 'AA-' from 'A+' based on the county's maintenance of good reserves and low debt burden, coupled with continually diversifying and growing economic and property tax bases. The outlook is stable.
The rating service also assigned its 'A+' standard long-term rating, and stable outlook, to the county' $51.03 million series 2008 refunding certificates of participation.
In Standard & Poor's opinion, the ratings also reflect the county's general creditworthiness; demonstrated commitment to repaying its appropriation-backed obligations; access to New York City's economic base; continued property tax base and market value growth; good financial position and fiscal management oversight; and low debt burden, coupled with modest additional borrowing plans.
The rating service opines that the county's above-average unemployment, which has exhibited improvement but still remains above state and national rates, offsets these strengths.
The stable outlook reflects the county's stable economic position with access to New York City's employment base, offsetting any concerns over above-average county unemployment.
"We believe county officials will maintain the county's balanced operations and adequate financial position," said Standard & Poor's credit analyst Jennifer Rosso.
Over the past three audited fiscal periods (2005-2007), the county has maintained reserves ranging from $20 million-$25 million. Over that period, the county generated operating surpluses in two of those fiscal years, closing fiscal 2006 with a nearly $3 million operating deficit. In fiscal 2006, the county's current fund experienced a nearly $3 million reserve drawdown that decreased the unreserved balance to $22 million, or 5.4% of expenditures. The county closed fiscal 2007 with a nearly $500,000 operating surplus and maintained reserves at a good 5% of budget, similar to fiscal 2006.
The county reports it is performing well against fiscal 2008 budget expectations. County officials expect to close the fiscal year with another surplus.
In Standard & Poor's opinion, debt burden, including appropriation and overlapping debt, is low at slightly more than $1,000 per capita, or about 1% of market value. Amortization of GO debt is rapid with officials retiring about 80% of principal over 10 years.
The county's substantial property tax base totaled more than $21.2 billion in fiscal 2006, an increase of 2.4% from fiscal 2005. The tax base has experienced steady growth over the past few fiscal years after a period of decline in the mid-1990s. County market value has experienced double-digit growth in each of the past six fiscal years and has more than doubled from 2001-2006. Market value is now $50.3 billion, or, in Standard & Poor's opinion, very strong at nearly $84,000 per capita, representing continued strong property tax base growth and diversification.
The rating action affects roughly $190 million of GO debt outstanding.
Complete ratings information is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Credit Ratings Search.
Media Contact:
Edward Sweeney, New York, (1) 212-438-6634
[email protected]
Analyst Contacts:
Jennifer L Rosso, New York (1) 212-438-7964
Richard J Marino, New York (1) 212-438-2058