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County retains strong bond rating

Artist's rendering of the planned St. Croix County highway facility. Submitted photo

Submitted by St. Croix County

On Jan. 30, Moody's Investors Service assigned its Aa1 rating to St. Croix County's $27 million General Obligation Highway Maintenance Facility Bonds. The Aa1 rating is the second-highest offered by the bond rating agency. Bond buyers use the rating as a measure of creditworthiness when considering the purchase of bonds as an investment.

Proceeds of St. Croix County's bonds will finance land acquisition and construction of a 135,000 square foot highway and ancillary facilities necessary for storage and maintenance of St. Croix County equipment. This facility will support maintenance and construction activities of transportation facilities of St. Croix County, other local governments, and the Wisconsin Department of Transportation. The facility will encompass equipment maintenance facilities, material storage, equipment storage, administration facilities, and other necessary items to fulfill core functions of transportation construction and maintenance. The existing facility is nearly 100 years old, located near a school, and is functionally unable to handle modern, larger equipment.

Following the bond sale, the county will have $56.2 million of GO debt, and the Aa1 rating applies to the outstanding debt.

In its rating report, Moody's identified several strengths, including the County's "large and growing tax base; a healthy socioeconomic profile; strong operating trends with sizeable reserves; and a moderate debt and pension burden."

County Administrator Patrick Thompson said, "Moody's strong credit profile rating of Aa1 reflects the overall prudent fiscal management of St. Croix County. Our fiscal house is in order and the local economy is strong. This affirmation by Moody's is significant because it should translate into lower interest costs on the bonds."

Moody's uses multiple symbols, ranging from Aaa to C, to designate the least credit risk to the greatest credit risk. To further refine the credit ratings, numerical modifiers 1, 2, and 3 are assigned to the rating classification. The best rating available is Aaa which is considered the highest quality and lowest credit risk. A C rating from Moody's is the lowest quality and has a low likelihood of recovering principal or interest. St. Croix's rating of Aa1 is considered high quality and a very low credit risk.

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