County Executive Leopold Reports Early Evidence that Slots Passage Could Boost Bond Ratings
Consultant says rating agencies will look favorably on new revenue
Annapolis (December 24, 2009) - County Executive John R. Leopold has received a report from William Cobbs of Public Resources Advisory Group, the County’s financial consultant, that says by signing legislation approving slot machines the County has increased its chances of earning the highest bond ratings available.
"The voters approved slots a year ago to send a strong message that they favor new revenue sources over tax increases," County Executive Leopold said. "Protecting our AAA bond rating from Standard and Poor’s is very important to our ability to fund construction projects at a low interest rate. Our advisor reports that this new revenue source, which would mean about $30 million more annually for the County, could even help improve our bond ratings from Fitch and Moody’s."
Standard and Poor’s awarded Anne Arundel County a AAA bond rating in 2007 - the highest rating available. The other two rating agencies rated the County at AA+ and Aa1, respectively.
"As the County’s economy improves, particularly the real estate sector, we will be approaching both Fitch and Moody’s to move their ratings of our bonds to the AAA level," Cobbs wrote in a communication to the Budget Office. "We will use the new, recurring revenue stream from the casino as an important factor in the justification for such upgrades. The new recurring revenue source, together with our strong, diversified economy, our other recurring revenue sources, our excellent fiscal management, as acknowledged by the credit rating agencies, and the benefits flowing from BRAC, will be the basis of our presentations to the credit agencies and should, though no predictions can be made without reservation, serve as the basis for the enhancement of our ratings."