NEWS
Town Receives AAA Bond Rating
S&P Global Ratings (S-&-P Global) recently assigned the Town of Davidson its AAA long-term rating for their series 2021 general obligation (GO) public improvement bonds. Davidson is the smallest town in North Carolina to be assigned a AAA rating, the highest rating that the town could achieve. S-&-P Global noted Davidson’s strength in multiple areas which led to the high rating:
- Very strong economy
- Very strong management, with strong financial policies and practices
- Strong budgetary performance
- Very strong budgetary flexibility
- Very strong liquidity
- Very strong institutional framework score
Davidson also received a second bond rating of Aa1 from Moody’s Investors Service, one notch lower than AAA and the second highest rating achievable from Moody’s. Moody’s indicated many of the same strengths in their evaluation of Davidson’s credit rating.
As a result of the ratings, Davidson will be able to procure a lower interest rate for its GO bonds, which were approved by voters in 2017 and 2019. A lower interest rate means it will cost the town less to borrow funds to finance the voter-approved projects.
Finance Director Piet Swart notes, “this is tremendously good news for the Town of Davidson. It not only confirms that the town has sound financial policies and practices and responsible management from elected officials and staff, but also enables the town to further save money due to achieving lower interest rates over the length of the loan.”
Town Manager Jamie Justice shares, “I’m so gratified with the result of the bond process and will be excited to see these bonds issued to fund critical voter-supported projects in public facilities, mobility, greenways, and parks and recreation for the community in the coming years.”
The Davidson Board of Commissioners approved the issuance of approximately $17.4 million in GO Bonds at their May 25 meeting. Next steps include bond pricing and sale on June 8 and bond closing and fund distribution on June 29. To learn more about the Davidson GO bonds, please click here.