August 20, 2019
Lake County's Strong Financial Management Helps It Secure AAA Bond Rating
AAA Bond Rating Helps Secure Lower Borrowing Costs
Lake County in 2019 has once again been awarded AAA bond ratings, the highest possible, by both Standard & Poor's Financial Services (S&P) and Moody’s Investors Service, two of the world’s largest credit rating agencies.
The high rating is important because it helps keep borrowing costs low. It also reflects a vote of confidence by financial experts in Lake County's strong financial management. According to S&P, it has awarded a AAA rating to only about three percent of all counties nationwide.
“The Lake County Board is deeply committed to fiscal responsibility,” said Board Chair Sandy Hart. “As a board, our first priority is to be good stewards of taxpayer dollars. Achieving the triple-A rating affirms that we are meeting that goal.”
In awarding the high rating, Moody’s noted Lake County’s large, diverse tax base, healthy operating reserves and liquidity, and modest debt.
The S&P report stated: "We view the management team as strong, as it has been able to consistently post positive general fund results in recent years and it has good financial policies and practices."
The AAA rating has led to significant tangible savings for Lake County. The county will realize more than $7 million in savings on borrowing costs over the next nine years from replacing and reissuing two transportation bonds. Nine account managers bid on the bonds in a competitive online auction on Aug. 7, and New York-based Morgan Stanley was the winning bidder, with a true interest rate of just 1.2297%.
The two bond issues that the new bonds replace were originally issued in 2010 and 2011 to fund the Rollins Road Gateway, Illinois Route 21 Improvement, Washington Street Underpass Thoroughfare Improvement and the Fairfield Road at Illinois Route 176 Intersection Improvement project.
The interest rate savings from this refunding means that instead of paying $7 million for debt service, the County will be able to invest in additional needed transportation infrastructure projects over the next nine years. Examples of improvements that are currently not fully funded that the County may be able to advance are the reconstruction of Arlington Heights Road in Buffalo Grove, the modernization and reconstruction of Hainesville Road in Round Lake Park and Round Lake Beach, and the reconstruction of Lewis Avenue from 14th Street to Illinois Route 120 in Waukegan.
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