Brunswick County enterprise utility system receives high credit ratings from S&P, Moody’s
BOLIVIA, N.C. – Brunswick County received high credit ratings with stable outlooks from two major financial research institutions, reflecting strong confidence in the County’s enterprise utility system’s general creditworthiness and financial strength.
S&P Global Ratings assigned its AA- rating to both the County’s series 2019A enterprise systems revenue and revenue refunding bonds and series 2019B taxable enterprise systems revenue refunding bonds. The company also affirmed its AA- rating on the county’s revenue bonds outstanding.
The S&P rating indicates a very strong opinion of the County’s enterprise and financial risk profiles. This includes the additional planned debt issuance in early 2020 for the Northwest Water Treatment Plant expansion project and the addition of a low-pressure reverse osmosis water treatment system.
Moody’s Investors Service also assigned the similar Aa3 rating to the same series 2019A and 2019B bonds, citing credit strengths such as a strong 788 days cash on hand position with modest projected increases over the next five years and adequate coverage as contributors to the high score.
“These ratings are among some of the highest a system can be assigned,” County Manager Randell Woodruff said. “Our ratings are a further reflection of the fantastic and important work our Finance and Public Utilities teams are doing to invest in our county infrastructure and ensure our finances are in the best shape possible.”
S&P recognized the system’s very strong enterprise risk profile in its report, noting several aspects that contributed to its opinion including:
- A growing service area economy focused on tourism and manufacturing sectors with adequate income levels
- Good operational management policies and practices—including very strong disaster response and proactive approaches to long-term water supply and water quality
In forming its opinion of the system’s very strong financial risk profile, S&P recognized several strengths including:
- Consistently good-to-strong all-in debt service coverage (DSC), which is anticipated to achieve a minimum 1.3x during the five-year forecast with the additional proposed 2020 bond issuance
- Extremely strong liquidity position, with more than $40 million in available reserves (and a minimum of 700 days cash historically), which is anticipated to be sustained at levels considered extremely strong
- Strong financial management policies and practices that reflect the system’s proactive approach to long-term planning
As of 2019, the County serves nearly 43,000 water customers and nearly 19,000 waste water customers. These figures do not include the number of customers served by wholesale water customers such as municipalities that provide retail services to mostly residential customer bases.
The County’s water customer base has increased by almost 16 percent and its waste water customer base has increased by nearly 30 percent since 2015.
“Our county commissioners and leadership recognize that as our county continues to grow both residentially and commercially, so does the need to expand our water and waste water systems to meet the demands,” Woodruff said. “These ratings from S&P and Moody’s show our current and potential future investors that we are protecting our infrastructure and financial assets in a responsible, innovative and transparent manner.”
Credit ratings opinions are based on analysis from experienced professionals who evaluate and interpret information received from issuers and other available sources, according to S&P. The ratings provide investors and market participants with information about the relative credit risk of issuers and individual debt issues.
Copies of the S&P and Moody’s reports are available online at https://www.brunswickcountync.gov/brunswick-county-enterprise-utility-system-receives-high-credit-ratings-from-sp-moodys
Our commitment to high water quality and service
Brunswick County is committed to providing our customers with access to clean, affordable and efficient drinking water. The Board of Commissioners stated its position and commitment to providing water and waste water service to the county’s wholesale, retail and industrial customers with a resolution earlier this year.
For the past 30 years, the County has led the financing and construction of the treatment systems and infrastructure needed to support the unprecedented growth in the county, including its current efforts to expand capacity at both the Northwest Water Treatment Plant and the Northeast Brunswick Regional Waste Water Treatment Plant.
As part of the Northwest Water Treatment Plant project, the County is proactively installing an advanced low-pressure reverse osmosis treatment system to treat and remove both regulated and unregulated materials from drinking water, including GenX, 1,4-dioxane and other per- and polyfluoroalkyl substances (PFAS). The County is expecting to go out to bid for the project this fall and for construction to begin in the winter.
Brunswick County and its consultants are also working on the design and construction of a 2.5 million gallons per day (MGD) expansion of the Northeast Brunswick Regional Waste Water Treatment Plant to support increasing demands due to growth in the northern region of the county. This project will increase the plant’s capacity to 4.975 MGD.
Construction on the plant is expected to begin November 2019 and receive full certification by November 2021.
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