UPPER MARLBORO — Prince George’s county has maintained its AAA Bond Rating from all three of Wall Street’s financial rating agencies – Moody’s, Fitch and Standard and Poor’s – County Executive Angela Alsobrooks announced on May 8.
“These successes and many others confirm that Prince George’s County is the economic engine in the state and region,” Alsobrooks said.
AAA is the highest possible rating assigned to issuers bonds by credit agencies. AAA ratings have the lowest risk of default, meaning the risk that a bond misses principle or interest payment, so it allows companies to borrow large amounts of money.
According to Prince George’s County Chamber of Commerce President David Harrington, the AAA bond rating paints the picture that the county is in a strong financial position which is desirable for businesses.
“It provides some surety for investors that they are working in a place that certainly is economically robust,” Harrington said. “AAA bond rating is really for the county as it begins to pull bonds and other things for county infrastructure. What that says also is that we have a strong business climate and at the same time increases opportunities for small businesses and public procurement. ”
Standard and Poor’s, Fitch and Moody’s are the three credit agencies that issue these ratings. Standard and Poor’s and Fitch use the AAA rating to identify bonds with the highest credit quality while Moody’s uses the AAA rating as its top credit rating.
Alsobrooks and her team traveled to Wall Street last month to meet with each agency and discuss current and upcoming accomplishments throughout the county. According to the county executive, less than 50 counties throughout the nation boast this Triple-A designation.
“We are very pleased that Moody’s and Fitch maintained our Triple-A rating,” Alsobrooks said. “These ratings are a sign of our sound fiscal policies and our ability to manage our obligations in a fiscally responsible way.”
In addition to credit ratings, Moody’s provides research, tools and analytics that contribute to a transparent and integrated financial market. They give out their credit ratings through Moody’s Investor Services which is also a leading provider of research and risk analysis.
In order to give a rating, the issuer requesting a rating must apply, and Moody’s goes about collecting information, meeting with the issuer and analyzing the information as well as monitoring the credit rating on an ongoing basis if needed.
In their report, Moody’s called the outlook for Prince George’s County stable.
“The stable outlook reflects the likelihood that the county’s financial position will remain stable,” they said. “The outlook also reflects the recent trend of growth in the county’s tax base, which will likely continue because of commercial and residential development and the county’s close proximity to the District of Columbia (Aaa stable).”
They cited factors such as failure to annually appropriate COPs debt service payments, declines in general fund reserves and liquidity, tax base erosion, material increase in debt burden and downgrade of the U.S government’s Aaa rating as factors that could lead to a downgrade for the county.
“We are proud that Wall Street rates the county’s financial and economic outlook at such a superior level of fiscal responsibility,” said County Council Chair Todd Turner. “The council remains committed to the collaborative and progressive work we have achieved together, and a thriving, sustainable financial future.”
Similar to Moody’s, Standard and Poor’s gives out credit ratings to government, corporate, financial sector and structured finance entities and securities in order to provide transparency and educate market participants on the area they are looking to do business in.
The company also highlighted aspects of the county that contributed to its high rating such as its strong financial policies and practices.
“Due to the county’s strong transportation network, and ample amounts of still-developable land, Prince George’s County remains poised for continued economic growth,” they said.
The high rating comes as the county has been making great strides in development, such as the ribbon cutting for the new Kaiser Permanente building and the announcement of the relocation of one of Metro’s central offices, both in New Carrollton.
“If you’re thinking about moving your business into Prince George’s County, you know you have a strong rating by an objective place that says the county is ready for business,” Harrington said. “It has a myriad of positive opportunities for the county in a way that provides certification for those that need that assurance that Prince George’s County will yield a higher return.”
Alsobrooks said that she, along with the county’s economic development team, will be going to the International Council of Shopping Centers convention in late May to meet with businesses and developers to gauge their interest in relocating to Prince George’s County.
“This top credit rating for Prince George’s County is a testament to our balanced fiscal management,” said Turner. “It also affirms the fiscal planning set forth for the county, the successful collaboration between County Executive Alsobrooks and this council, and our responsible stewardship over county resources, focusing on greater efficiency, oversight and accountability in government.”