Holmdel recently joined an elite group of only 19 other New Jersey municipalities when Moody’s Investors Service assigned the Township its top credit rating of “Aaa.”
When the Township sold $14.18 million in General Improvement Bonds on Wednesday, May 1, it did so at a 10-year borrowing rate of 1.942%, joining the Township of Chatham as the only other New Jersey municipality in recent years to earn a rate under 2% for the same duration.
According to Sherry Tracey, who serves as the Senior Managing Director of Phoenix Advisors, the Township’s Municipal Advisor, the rate is equivalent to what many towns are paying for one-year notes.
“We’re living in a time of increased fiscal pressure at the State level, making it extremely difficult to earn this prestigious “Aaa” rating, especially as a new credit rating,” Mayor Eric Hinds said. “Receiving this designation speaks to the financial strength and stability of our community, as well as the bright economic future ahead of us.”
The Township has not held a credit rating in recent years, as most debt has been sold through the Monmouth County Improvement Authority, utilizing the County’s “Aaa” bond rating.
Holmdel now joins the Borough of Rumson as the only Monmouth County municipality with a Moody’s “Aaa” bond rating.
Moody’s cited the strong finances, healthy resident wealth and income and a stable tax base in its decision to award the “Aaa” position.
In addition to those factors, Township Administrator Donna Vieiro recognized the fiscal responsibility practiced by Holmdel’s municipal employees.
“Our staff continues to exercise responsible spending, and has not only maintained quality services for our residents, but in some instances has added programming and offerings, while reducing spending,” said Vieiro. “I can’t credit them enough for helping the Township achieve this revered rating.”
The successful redevelopment of the Bell Works property, and the diverse cross section of technology, commerce and community-based organizations it has attracted – as well as future prospects for the blossoming metroburb – will continue to help stabilize Holmdel’s tax base, and only strengthened the Township’s case for the “Aaa” rating.
“This is an incredible financial move for Holmdel and I want to thank our Township Administrator, Donna Vieiro for leading this initiative,” added Hinds. “Holmdel is a wonderful community to live and work in. Great things are happening here and we are proud that Moody’s was able to recognize this, and assign the Township the highest credit rating possible.”
“In a strong municipal bond market that is already starved for new issuance, the Township secured a final rate on the bond sale approximately 10 to 15 basis points lower than anticipated due to the assignment of the “Aaa” rating,” added Tracey. “This reduction results in reduced interest costs over the 10-year life of the bonds of approximately $125,000.”