Moody's Upgrades Chatham County, GA's Issuer Rating to Aaa

Strategic Insights -

Chatham County, GA's strong economic growth, prudent budget management, and low long-term liabilities have led Moody's Investors Service to upgrade its issuer rating to Aaa from Aa1. The county has approximately $84.6 million in debt outstanding, and the upgrade reflects the sustained trend of economic growth, driven by the Port of Savannah, major medical centers, and a growing tourism industry. This has resulted in tax base and population growth, improved resident incomes, and a strengthened financial position.

Key Takeaways:

  • The upgrade to Aaa is driven by continued growth and diversification of the Savannah region's economy, a sustained trend of prudent budget management, and the maintenance of very low long-term liabilities.
  • The county's strong economic growth has driven tax base and population growth, improved resident incomes, and a strengthened financial position.
  • The county's revenues have remained relatively resilient through past economic cycles, including the Great Recession and the COVID-19 pandemic.
  • The county has unlimited legal authority to increase property taxes and broad legal authority to control expenditures should a prolonged economic downturn present budget headwinds.
  • The issuer rating reflects the county's very low long-term liabilities, which were equivalent to 44% of revenue at the end of fiscal 2024.
  • The county currently has no plans to issue new debt that would materially change this ratio in the coming years.
  • Chatham County is exposed to perennial physical climate risks, primarily those associated with hurricanes, but has maintained healthy reserves and a history of state and federal government support for disaster recovery and relief.
  • The Aaa rating on the GOULT revenue bonds is placed at the same level as the issuer rating because the bonds are backed by the government's pledge to levy an ad valorem tax on all taxable property.

Statistics:

  • The county had approximately $84.6 million of debt outstanding at the end of fiscal 2024.
  • Long-term liabilities were equivalent to 44% of revenue at the end of fiscal 2024.
  • The county has consistently made pension contributions above its tread water payment and has fully funded its OPEB plan.
  • The county's coastal location exposes it to perennial physical climate risks, primarily those associated with hurricanes.

Sources:

  • Moody's Investors Service, "Rating Action: Chatham County, GA", available at https://ratings.moodys.com/rmc-documents/425431
  • Moody's Investors Service, "Rating Methodologies: US Cities and Counties", available at https://ratings.moodys.com/rmc-documents/425429.