Finding Mobile County’s financial position “solid,” Moody’s Investors Service has upgraded the municipality’s debt rating — a designation that will likely lead to lower interest rates when county commissioners borrow money in the future.
The long-term debt rating was upgraded from an Aa2 to Aa1 this week, and according to Moody’s, Mobile County has a “sizeable and regionally important tax base” that should see “commercial and industrial growth” continue over the next 12 months.
Moody’s also listed the county’s outstanding debt and pension burden as “affordable.” Finance Director Dana Foster-Allen told Lagniappe last week that Mobile County’s current outstanding debt is around $141 million, which is down from more than $157 million in 2016.
On Friday, Commission President Merceria Ludgood said the upgrade was “great news” for the county, which she called “a regional economic driver.”
“Many positive factors have worked together to strengthen our economy and have contributed to Moody’s upgrade,” Ludgood said. “The decision of several national and international companies to build in Mobile County has increased our commercial and industrial base., and the Port of Mobile, the ninth largest in the U.S. based on tonnage, is a huge player in our economy.”
According to Foster-Allen, Mobile County’s direct debt burden is low, calculating it at 0.4 percent of full value.
With the change in the Moody’s designation — an industry standard among large lenders — Foster-Allen believes the county could see its interest rates for financing in the long term-debt market drop by “at least half a percent” in the future.
“The Commissioners have a formal policy requiring our Unassigned General Fund balance to be a minimum of 16.65 percent of our annual budgeted operating expenses,” she added. “The balance this year is projected to be 25 percent.”
Commissioner Connie Hudson credited Moody’s decision to a “conservative and consistent approach” to planning and debt, adding that local universities and workforce development initiatives have also given Mobile County an advantage when recruiting businesses to the area.
In recent years, Moody’s has taken a favorable view of the entire region. While the city of Mobile hasn’t seen a rating increase, Moody’s upgraded the city’s outlook to “stable” in 2016.
District 3 Commissioner Jerry Carl pinned some of that success on some of the marquee names in a variety of industries that have settled in the area in recent years.
“We continue to work hard to bring new businesses and industries like Walmart, Amazon and suppliers for Airbus to Mobile County,” Carl said. “That means more and better-paying jobs for our citizens and a steadily growing economy for Mobile County, all those factors help when Moody’s looks at a community.”