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County's credit rating up for review
Officials don't fear possible downgrade
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Forsyth County News

Talk in Washington about credit ratings hasn’t escaped the local level.

Forsyth County recently received a letter from Moody’s that its AAA credit rating is under review.

The county receives ratings from both Moody’s and Standard and Poor’s, which labels Forsyth an AA+, just one step below Moody’s.

Finance director David Gruen said the county was one of 168 AAA agencies identified by Moody’s for review following the nation’s debt discussions.

"Since the federal government’s potentially coming down off of AAA with Moody’s, they’re looking at whether or not they should also keep the local governments at the same level," Gruen said. "They’re only looking at their highest rated ones, like us."

In that group, Moody’s added a "negative outlook" tag on the end of those ratings until each one can be reviewed, Gruen said.

"I don’t anticipate it being downgraded," he said. "Nothing’s really changed from when they gave us the AAA rating back in January."

The county expects to lay out its case during a phone call with a Moody’s representative within the next couple weeks.

Gruen explained the credit rating is important to keep borrowing rates low and lenders interested in doing business with the county.

"In a sense, it’s a credit score for an organization or government," he said. "If your credit score is not good, you have to pay more interest."

Bryce Holcomb, a CitiGroup investment banker who often works with Forsyth, said the county doesn’t "fit in the box" of the 168 entities with AAA ratings that have been put under review.

During an Aug. 4 meeting of the water and sewer authority, Holcomb listed the four items typically considered by Moody’s in determining a rating.

Those include reserves, growth, number of variable rate bonds and correlation with the federal government and metro Atlanta funding sources.

The county’s reserves have recently grown. It has only one variable rate bond, and it receives little federal funding, he said.

Holcomb plans to help the county make those points to Moody’s during the upcoming phone call.

"If we can answer the questions that they have and I think we can — I think we’ve got great arguments with all four of those — I don’t think we’ll get downgraded," he said.

"What Moody’s has done is they’ve put a ‘negative outlook’ on all those 168 credits that are on review. That’s kind of a half bump down. But what they’ve said is they will remove that negative outlook after the call that we have if we answer their questions and we basically make them happy."

County Commission Chairman Brian Tam said during the authority’s meeting that Forsyth looks forward to getting its say with Moody’s.

"We’ve worked hard to be where we are financially," Tam said. "We plan to stay there."