Even as the impacts of the COVID-19 pandemic threaten government revenues and budgets around the country, the nation’s three top bond rating agencies have affirmed Loudoun County’s strong bond ratings. And last week, that good credit saved the county a little under $50 million in financing costs on the project to bring Metro’s Silver Line into Loudoun.
The three ratings agencies affirmed Loudoun’s AA+ and Aa1 ratings on its lease revenue bonds—which led to low interest rates for the county when it sold those bonds May 28 and helped the county refinance the loan it took to pay for a portion of the project to extend the Silver Line into Loudoun.
Lease revenue bonds are repaid by revenues generated by the projects they help finance, avoiding using taxpayer dollars. On Thursday, the county sold $267.3 million in lease revenue bonds through the Economic Development Authority at 1.79-percent interest.
That included refunding the outstanding Transportation Infrastructure Financing Innovation Act loan, used to finance the Dulles Metrorail project. That will save the county $48.5 million, through a lower interest rate and shorter repayment period.
Those credit ratings agencies also reaffirmed the AAA ratings on the county’s general obligation bonds.
Loudoun County has held the Aaa rating from Moody’s since 2004, and AAA ratings from Fitch Ratings and S&P Global since 2005. Those agencies noted Loudoun’s county’s robust economy, the size and diversity of its tax base, growth potential and strong management.
Moody’sratingsnoted the county’s diverse and growing tax base, healthy fund balance and liquidity, and manageable debt. Meanwhile Fitch noted the county’s strong revenue growth, expenditure flexibility, moderate long-term liabilities, and economic prospects. S&P’s assessment highlighted the county’s extensive financial management and long-term planning, robust local economy and successful economic development team, and strong overall economic and financial indicators.
All three agencies also acknowledged the evolving impacts of the COVID-19 pandemic on public finances, but also noted the actions the county has already taken on its budget, such as freezing non-essential spending and new hiring, and setting aside $100 million in reserve in the next fiscal year’s budget.
“This an unprecedented time for Loudoun and for our nation, and the credit rating agencies were understandably thorough in their evaluation of our finances,” said Supervisor Matthew F. Letourneau (R-Dulles), who chairs the board’s finance committee. “That’s why it is particularly noteworthy that Loudoun’s AAA bond ratings were once again affirmed. The agencies specifically noted our strong fiscal management and diverse economy. I look forward to a successful bond sale at favorable interest rates.”
Thursday’s lease revenue bond sale also included a long-term financing of its Series 2018 Metrorail Bond Anticipation Notes. Six bidders bid on those bonds; J.P. Morgan Securities LLC made the bid with the lowest interest rate, which the county accepted.
Proceeds from the bond sales will also be used to finance projects including shops and warehouses for the county government, the courthouse project in downtown Leesburg, a replacement for the county’s Land Management Information System, and a public safety firing range, as well as broadband internet infrastructure and new school buses for the school system.
More information on Loudoun County finances and its triple-A status is online atloudoun.gov/BondRatings.