Upgraded bond rating positions Cabarrus to save millions

Published on May 11, 2022


Cabarrus County Government earned the distinction of a triple-A rating by Fitch Ratings and Moody’s Investors Service—two of three national bond rating agencies. This is the first time in history the County achieved triple-A status.

The rating positions the County—and in turn taxpayers—to save millions in interest over the next decade.

The triple-A rating is the highest available. According to the North Carolina State Treasurer’s Office, only 10 other counties in the state have earned the distinction.

Cabarrus also maintained its AA+ rating with S&P Global Ratings.

According to the University of North Carolina School of Government, when a  government agency wants to finance projects—usually one-time, large-scale capital (building) projects—it can take on debt. Nearly all this debt will be in the form of bonds that are guaranteed by the agency’s assets or property taxes. To secure the bonds, the agency must publicly market the debt it plans to take on through investment bankers.

Bond ratings directly affect the interest rates charged for the amount owed and the amount due on that debt.

“By upgrading the County to triple-A, Fitch and Moody's show the public and potential investors that Cabarrus practices conservative budgeting, develops comprehensive multi-year financial plans and has strong governance that comes from leadership and policies,” said Board of Commissioners Chair Steve Morris. “These higher bond ratings will result in lower interest rates for the County, saving taxpayers money and enabling additional investments in critical capital projects.”

The status upgrade followed an April meeting between County leadership and bond rating experts. The meeting assessed the County’s:

  • Economic health and stability
  • Operational and fiscal management practices
  • Economic development achievements

The agencies released the ratings on May 6 with the following notes:

Moody’s Investors Service: “The upgrade to AAA general obligation unlimited tax (GOULT) rating reflects the County’s ongoing tax base growth and long-term trend of fiscal stability evidenced by the maintenance of strong reserve levels and conservative budgeting practices. The rating also incorporates the County’s above-average income and wealth metrics and manageable long-term liabilities.”

Fitch Ratings: “The County's combined overall debt and net pension liabilities are low as a percentage of residents' personal income and are expected to remain low as the resource base grows. The liability burden is primarily driven by direct debt, which amortizes at a rapid pace. The County's superior inherent budget flexibility, and ample general fund balance, position it to comfortably manage through economic downturns without diminishing its overall financial flexibility.”

S&P Global Ratings: “The 'AA+' long-term rating on Cabarrus County further reflects our view of: strong trend of a growing economy, with access to a broad and diverse metropolitan statistical area (MSA); conservative management practices, supported by a very strong institutional framework score; historically stable performance with very strong fund balance position; and high but currently manageable carrying charges with long-term capital planning and limited pension pressures.”

In recent months, commissioners and staff have had multiple public discussions about capital needs, debt, terms of debt, refinancing and the bond rating process.

With the new bond ratings in place, the County will take on $103 million in fixed debt to address capital projects in its five-year financial plan. This includes construction of the courthouse (on behalf of the state) and the new Roberta Road Middle School. The public sale of this debt is scheduled to take place on May 18.

Residents can learn more about the County’s budgeting and financial processes by participating in the upcoming class: Government 101: FY23 Budget Breakdown, scheduled for May 31, from 9 a.m. to 2:30 p.m. The class informs residents ahead of a public hearing on the FY23 budget. To register, email outreach@cabarruscounty.us or call 704-920-2266.



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