2011 News

December 8, 2011

Moody’s Investors Service Confirms Stable Aaa Bond Rating for Bucks County

On Wednesday, December 7, Moody’s Investors Service announced that it has completed its assessments of the rating outlooks of five Aaa-rated states and 161 Aaa local governments, among them Bucks County. As a result of that assessment process, Bucks County had its outlook revised to “stable” from “negative.”

According to Moody’s: “These actions reflect our view that the vast majority of Aaa-rated state and local governments demonstrate an adequate degree of independence from the U.S. government and therefore could be rated higher than the sovereign. The Aaa-rated state and local government issuers with outlooks that have been restored to stable are considered to have lesser financial and economic linkage to the U.S. government.”

Moody’s assigned negative outlooks to bond issuers on August 4, 2011, two days after the confirmation of the U.S. government’s Aaa rating and assignment of a negative outlook. Bucks County earned its first-ever Aaa rating from Moody’s during April, 2010. Only four (4) percent of all Moody’s-rated state and local governments presently are rated Aaa with a stable outlook.

“Although in the current economic environment we should never assume anything, it was hoped and anticipated that Moody’s would reinstate Bucks County’s stable outlook,” noted County Chief Operating Officer Brian Hessenthaler.

“These actions are based on an expanded evaluation of the exposure each municipality has to the U.S. government, including economic sensitivity to federal spending reductions, dependence on federal transfers and exposure to capital markets disruptions,” stated Moody’s Managing Director Naomi Richman.

“The County’s goal was always to secure and maintain a stable Aaa rating,” added County Director of Finance and Administration David Boscola. “With the upgrade and revised outlook, the County will realize significant savings on the 2011 bond issue and future borrowings.”

Moody’s analysis includes specific metrics such as federal procurement activity, federal employment and healthcare employment as indicators of economic sensitivity, Medicaid expenditures for states and public hospital expenditures for local governments.