County happy with ratings by Wall Street Good marks could mean $90,000 yearly savings

March 05, 1996|By Dan Morse | Dan Morse,SUN STAFF

Armed with their most rosy financial figures and job growth numbers, Howard County political leaders hit Wall Street last month, hoping to persuade three financial ratings services to award them the highest marks.

Their results -- two for three -- could mean $60,000 to $90,000 in savings a year because the county is expected to be able to borrow money at a lower interest rate.

"We full-court-pressed them," County Council Chairman Darrel Drown said of the county's presentation. "We put on a good show, I thought -- and it worked."

Among other services, the three groups rate the credit worthiness of governments. For Howard:

Moody's Investors Service Inc. gave the county a Aaa rating, its highest, and one step up from Howard's previous rating of Aa+.

Standard & Poor's Investors Service left its rating at AA+, its second-highest rating.

Fitch Investors Service again gave the county a AAA rating, its highest.

Ray Wacks, the county budget administrator, said it was important for the county to receive the top AAA rating from either Moody's or Standard & Poor's, which he said are the two major players.

"This is a real breakthrough for Howard County," Mr. Wacks said.

He said the new rating is expected to lower interest rates for the county between .10 and .15 percentage points, which corresponds to up to $90,000 a year in debt service savings on the more than $60 million in bonds that the county is scheduled to sell on March 13.

At Moody's, Vice President John Incorvaia said he was impressed with the county government's financial management and the county's demographics.

"Obviously, they have a lot of wealth within the county itself," he said. "We feel that they have their debt position under control, although they have to watch that."

About 12 percent of the county's operating budgets goes for debt service. County Executive Charles I. Ecker has pledged not to exceed that and is trying to reduce it.

Two other counties in Maryland receive AAA rating from Moody's, Baltimore and Montgomery.

The state of Maryland is one of eight states with AAA ratings.

In Maryland, three entities -- Baltimore and Montgomery counties and the state of Maryland -- enjoy AAA ratings from all three services, Mr. Wacks said.

He said that Howard, as a growing county, must borrow a lot of money for new projects and roads, which makes it more difficult to achieve the high rating.

The Howard delegation that went to New York included Mr. Drown, Mr. Wacks, Mr. Ecker, Finance Director Dale Neubert, Economic Development Authority Director Richard Story, County Administrator Raquel Sanudo and Patrick O'Connell of Evergreen Capital Advisors, the county's bond counsel.

Pub Date: 3/05/96

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