At a time when federal, state and local governments are trying to balance their current budgets and establish their income and spending guidelines for next year, Milford Township officials received some good news.
Standard and Poor’s has upgraded Milford Township’s credit rating from AA to AA+ for general obligation bonds. This represents an improvement from the township’s rating issued in 2008.
A credit rating is Standard & Poor’s opinion on the general creditworthiness of an obligor, or the creditworthiness of an obligor with respect to a particular debt security or other financial obligation. Over the years credit ratings have achieved wide investor acceptance as convenient tools for differentiating credit quality.
According to the S & P report, Milford Township’s outlook is stable. At the same time, Standard & Poor’s has assigned its ‘AA’ long-term rating, and stable outlook, to the township’s series 2013 GO bonds. The ratings reflect what is viewed as the township’s very strong economy and budgetary flexibility. The economy benefits from participation in the broad and diverse economy of the Philadelphia-Camden-Wilmington metropolitan statistical area (MSA).
Of the report, Milford Township Supervisors’ Chairman Bob Mansfield commented that, “Financial management is done continuously over years. We don’t spend more than we have and we plan so we are prepared if there are bad times.”
The ratings also reflect what S & P considers Milford Township’s: Very strong budgetary flexibility, with 2012 audited reserves at nearly 50 percent of general fund expenditures; Strong budgetary performance supported primarily by reliable property taxes, with no appreciable funding interdependence with the state or federal government; Very strong liquidity, providing very strong cash levels to cover both debt service and expenditures; Adequate management conditions with standard policies in place; and weak debt and contingent liabilities position, driven mostly by the township’s high direct and overlapping debt.
Officials were happy with the news of the upgrade. Supervisor Charles Strunk commented that, “The upgrading of Milford’s credit rating by Standard & Poor is recognition that we have been doing our job to responsibly manage the township’s resources.”
Supervisor Tom Courduff added, “The taxpayers will benefit from this upgraded rating. Our open space bond refinancing will be more attractive to investors resulting in lower rates and lower long term costs.”
The recent S&P rating was issued in response to Milford Township’s desire to issue a bond offering to refinance outstanding open space bonds, at lower rates.