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Posted on: February 2, 2021

County’s Utility Revenue Bonds Rating Outlook Upgraded

Man in business suit points towards a screen with bond ratings

Good news amidst the challenging pandemic, Fitch Ratings recently affirmed the County’s Utility Revenue Bonds at ‘AA’ and upgraded its Rating Outlook to Positive from Stable. It has also assigned a Stand Alone Credit Profile (SCP) of ‘aa’.

“Bond ratings are important,” said Clerk Stacy Butterfield, Polk County Clerk of the Circuit Court & Comptroller. “Favorable ratings result in better interest rates. This helps lower debt service payments, which ultimately factor into the rates paid by users of the system.

“My office works in partnership with the Board of County Commissioners and this upgrade is a testament to the success of the Board’s strong financial management and policies.”

According to Fitch Ratings, the revision in Outlook to Positive from Stable reflects Fitch's expectation that the system's continued favorable operating results and very low leverage through Fitch's forward-looking scenario analysis could warrant a credit Upgrade. 

The affirmation of the 'AA' bond rating and the assessment of the SCP at 'aa' reflect the system's current very strong financial profile within the framework of its very strong revenue defensibility (assessed at 'aa') and low operating risk profile (assessed at 'a').

As stated by the company, the strength of the system's revenue defensibility is rooted in the county's strong revenue-raising ability, supported by a growing primarily residential customer base. The system's operating cost burden, while currently very low, is expected to increase over the next five years, but remain consistent with the assessment. A moderate life cycle ratio is supported by adequate capital investment, which is expected to continue over the forward look.

Fitch Ratings also stated that very favorable demand characteristics are supported by strong customer growth, which is expected to provide ample revenue with no anticipated rate increases.

The outbreak of the coronavirus has not shown significant impairment to the system's revenue or cost profiles. However, Fitch's ratings remain forward-looking in nature, and as such, the agency will continue to monitor developments related to the severity and duration of the virus outbreak, and revise expectations for future performance as appropriate, according to Fitch Ratings.

View the Clerk’s annual publication, the Popular Annual Financial Report, to learn more about Polk County’s finances. This condensed report is produced each year for residents to provide a concise, reader-friendly summary of how County resources are used. View the report under our Public Funds section.

The information shared in this release is extracted from the press release distributed by Fitch Ratings.