Stafford Township’s Bond Rating Gets a Boost

Jan 10, 2018

Stafford Township’s general obligation unlimited tax (GOULT) rating just went up from A1 to Aa3, according to Moody’s Investors Service, which is one of three major rating agencies. The upgrade affects approximately $7 million of rated debt.

A credit rating is a tool for evaluating risk – the rating agency’s opinion as to the creditworthiness of the bond’s issuer. Moody’s ratings range from triple-A (strongest) to C (weakest).

According to Moody’s, the upgrade reflects the township’s improved financial position as shown in consecutive operating surpluses and a strong fund balance position. The rating also incorporates the township’s sizable tax base and above-average debt and pension burden.

Factors likely to lead to an upgrade include sustained increases in fund balance and cash levels, substantial growth and diversification in the township’s tax base, and socioeconomic indicators. Factors that could lead to a downgrade include deterioration of reserves or cash position; material decline in the township’s tax base and wealth and income levels; substantial increase in debt or pension burden, and material rise in fixed costs.  —V.F.

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