Release Date: July 22, 2011
Stephen G. Riley , Town Manager
Bond Ratings Affirmed:
All three national bond rating firms recently affirmed the Town's bond ratings and rating outlook.
|Standard & Poor's||AA+/Stable|
The ratings affirmation applies overall to the Town's General Obligation Bonds. The rating also applies specifically to the upcoming General Obligation (GO) Refunding Bonds, Series 2011A.
In the ratings releases, the rating firms made the following statements:
Moody's cited as factors in its rating the Town's strong financial position, supported by comprehensive fiscal policies, ample fund balance levels, long-term operating stability and a low direct debt burden. The rating also considers the Town’s importance as a tourism center, the sizable tax base, and the high wealth levels of the population.
According to Standard & Poor's, its rating is based on the well-established, tourism-centered local economy with low unemployment; an affluent year-round population; a large and diverse tax base which has shown minimal recessionary decreases in home valuations, new construction and existing home sales; the strong financial position and a low other postemployment benefits liability.
"This is very good news" stated Steve Riley, Town Manager. "We are very pleased with the Town's affirmations from the bond rating firms." In addition to the Town's ongoing large reserves, diversified revenues, and strong financial and budgetary policies, Riley cited the Town's recent improvement in tourism-based revenues and its efforts to create savings in planned expenditures during the economic downturn as contributing factors to the strong bond ratings.
Bonds Refunded to Create Significant Savings:
The Series 2011A bonds have a par value of $12,385,000 and a true interest cost (TIC) rate of 3.19%. They will refund the callable 2004A GO Bonds which were issued for land acquisition.
On July 20, 2011, the Town received ten bids on this offering which is an indication of the market’s strong interest in the Town of Hilton Head Island’s municipal bonds. This refunding issue represents a present value savings of 5.16% and will save the Town $579,040. The Town expects to close on the refunding on August 3, 2011.
"The Town monitors its outstanding debt on a frequent basis to identify potential savings in debt service costs" stated Mayor Drew Laughlin. "Realizing these savings is important to the Capital Improvement Program as the Town seeks to reinvigorate the local economy and encourage redevelopment."