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Henrico’s triple AAA bond ratings reaffirmed

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March 4, 2024


County prepares to issue $121 million in bonds for schools, other projects

Henrico County’s triple AAA bond ratings – the highest possible endorsement of its creditworthiness – have been reaffirmed ahead of a sale of bonds to improve schools and other public facilities.

S&P Global Ratings, Moody’s Investors Service and Fitch Ratings last week confirmed their previous AAA ratings for Henrico after reviewing its finances and visiting the county in February. Henrico is positioned to earn the lowest available interest rate when it issues $121.4 million in general-obligation bonds to finance a package of capital improvement projects. The sale is expected in mid-March.

“The reaffirmation of Henrico’s AAA bond ratings is great news for our residents and other taxpayers because it means millions of dollars will be saved as we strengthen our community’s high quality of life by reinvesting in our schools, parks, fire stations and other public facilities,” County Manager John A. Vithoulkas said. “These independent ratings, once again, recognize Henrico’s outstanding financial stewardship and vibrant local economy. With the upcoming bonds sale, we will continue to deliver the projects that we had outlined when voters went to the polls and approved the 2016 and 2022 bond referendums.”

The Board of Supervisors in January authorized the sale of $121.4 million in bonds to support 10 projects. The bond proceeds will be used as follows, with some projects in planning and design phases and others ready for construction:

  • $86 million for school projects, specifically the new Environmental Education Center at Wilton Farm and replacement schools for Jackson Davis Elementary, Longan Elementary and Quioccasin Middle;
  • $13.3 million for a new Fire Station 6 in Eastover Gardens;
  • $17.7 million for an access road to serve the planned Three Chopt Area Park and Henrico Pet Adoption Center and general improvements to Tuckahoe Creek and Tuckahoe parks;
  • $2.5 million for drainage improvements countywide; and
  • $1.9 million for a widening of Richmond-Henrico Turnpike, which is underway.

S&P Global, Moody’s and Fitch assigned their ratings with a “stable” outlook.

In a summary of its findings, S&P Global cited Henrico’s “very conservative budgeting” and “thriving local economy,” with sports tourism expected to continue growing with the recent opening of the Henrico Sports & Events Center. “Henrico County’s extensive and well-integrated financial management, combined with a thriving local economy, has enabled the county to produce a strong track record of financial performance, considerably boosting financial flexibility in recent years,” the company said.

In a news release, Moody’s said its “rating reflects the county’s large and dynamic economy with strong property wealth and a growing population with above average incomes. Additionally, the rating reflects the county’s healthy financial position with reserves that have largely been growing in recent years and which is supported by strong management that has demonstrated conservative budgeting and expenditure management practices.”                               

Fitch Ratings credited Henrico’s fiscal management and resilience, particularly during economic downturns. It also noted the current budget reflects steady tax rates plus a 10-cent reduction in the personal property tax rate for vehicles as well as increased spending for education, salary increases, new positions and $44 million in “pay-as-you-go funding” for capital needs. “[G]iven the county’s history of conservative budgeting, Fitch expects operating performance to remain sound, consistent with past performance,” the company said in a news release.

Henrico has received AAA ratings from S&P Global and Moody’s since 1977. The county became “triple AAA” in 1998, after Fitch joined the other major rating agencies and assigned an AAA rating to Henrico.

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