Northampton County reports AA1 Moody’s rating ahead of planned summer bond sale

Northampton County Council was told April 3 that Moody’s Investors Service has assigned the county an AA1 rating, a county official said, and that the county plans to bring bonds to market later this summer to finance replacement of a county garage.

At the meeting, Mr. McCoy, a county official, said the county completed a ratings call with Moody’s in advance of planned borrowing and that the AA1 designation places Northampton County at the high end of the “AA” category. “Let me repeat. Northampton County’s Moody’s rating is AA,” he said, later adding, “But our rating is AA 1, which means we are the very highest in our pool.”

The official explained Moody’s uses modifiers 1, 2 and 3 within rating categories to indicate higher- to lower-end placement; AA1 indicates a mid- to high-quality standing with very low credit risk. He said the county will seek market issuance of bonds “sometime later this summer” to fund the garage project.

McCoy outlined two reasons he believed the county did not receive a AAA rating: the county’s 2022 tax cut and the county’s continued moral obligation related to owning a long-term care facility. He said those factors, in Moody’s view, weigh against the top rating but that AA1 still reflects a strong fiscal position.

Council members did not take formal action on the report at the meeting; the remarks were delivered as an informational item during the evening’s reports.

The county’s AA1 rating could influence interest costs when bonds are sold; county staff indicated they will return with scheduling and sale details later this year.