Staff Report for The Island Eye News
“The Town of Sullivan’s Island is pleased with the excellent bond ratings it recently received from the nation’s two largest rating agencies,” said Mayor Pat O’Neil.
“In connection with the Town’s issuance of approximately $20 million of Installment Purchase Revenue Bonds to finance improvements and upgrades to the Town’s wastewater treatment plant and collection system, the Town sought credit ratings from Moody’s Investors Service and Standard and Poor’s in order to enhance the marketability of the Bonds,” said Water and Sewer Committee Chair Bachman Smith IV.
The starting point for each agency in rating this type of debt is by assigning an issuer rating/implied General Obligation Bond rating. The Town received an issuer rating/implied General Obligation Bond rating of “Aa1” and “AA+” from Moody’s and S&P, respectively, which are the second highest ratings that can be assigned. Both rating agencies typically rate Installment Purchase Revenue Bonds one notch below this issuer rating/implied General Obligation Bond rating and therefore assigned ratings of “Aa2” and “AA” to the Bonds. In assigning these ratings, the agencies noted several strengths of the Town, including its strong financial performance and management.
“Given that credit ratings are one of the primary factors in determining interest rates, it is expected that the high rating designations will serve the Town well when it sells the Bonds on July 17, 2018,” said Town Administrator Andy Benke.