UNION — A policy of carefully monitoring their finances combined with the promotion of economic development is being credited with the City of Union and its Combined Utility System receiving a high bond rating from Moody’s Investor Services.
According to its website (www.moodys.com) Moody’s Investors Service “is a leading provider of credit ratings, research, and risk analysis. Moody’s commitment and expertise contributes to transparent and integrated financial markets. The firm’s ratings and analysis track debt covering more than 135 sovereign nations, approximately 11,000 corporate issuers, 21,000 public finance issuers, and 72,000 structured finance obligations. Moody’s Investors Service is a subsidiary of Moody’s Corporation (NYSE: MCO), which reported revenue of $3.6 billion in 2016, employs approximately 11,700 people worldwide and maintains a presence in 41 countries.”
Under the Moody’s Investors Service’s ratings system, securities are assigned a rating from Aaa to C, with Aaa being the highest quality and C the lowest quality. An A2 rating means the entity that the entity that received it is rated as upper-medium grade and a low credit risk and has the best ability or high ability to repay short-term debt.
A2 is the rating that the City of Union and its Combined Utility System were recently awarded by Moody’s.
In a statement released Thursday, City of Union Mayor Harold E. Thompson announced Moody’s awarding of the A2 bond rating to the city and the utility system.
“I am very pleased that Moody’s recognized the strong financial position of the City and our Combined Utility System,” the Thompson said. “In its assessment of the City, Moody’s cited ‘[t]he financial position is expected to remain strong given conservative budget management, sound liquidity and limited debt burden.’”
Thompson pointed out that “with this first time Moody’s rating, the City and the Combined Utility System have joined numerous other South Carolina municipal entities in receiving this solid investment grade rating of A2. We will continue our watchful approach to financial management and promote economic growth in our tax base.
The press release states that in its evaluation of the Combined Utility, Moody’s cited that ’[f]inancial flexibility will likely remain healthy because of conservative budgeting and strong rate setting policies… along with a strong debt [service] coverage ratio and ample liquidity.’ Additionally, Moody’s stated that ‘usage will likely stabilize in the Combined Utility because of revitalization and industrial expansion within the service area.’”
Thompson praised the City of Union’s Finance and Combined Utility departments for their leadership in obtaining this rating. He said that because of the A2 rating the city will receive $630,000 from the State Debt Service Reserve Fund which will go into the city’s coffers and which can be used to address the needs of the city and the utility department. The city, along with other South Carolina municipalities pay into the fund and so the city will be getting back some of what it has paid into it over the years.
The City of Union and its Combined Utility System have both received an A2 bond rating from Moody’s Investor Service. With the awarding of the A2 bond ratings, the city will be able to receive $630,000 from the State Debt Service Reserve Fund.