Darien receives Aaa bond rating
DARIEN — Town Officials announced Monday that Darien’s $12.5 million in general obligation bonds have been awarded a Aaa rating by Moody’s Investor Service.
“Moody’s assesses the credit-worthiness of the town by reviewing data on the local economy and tax base, available fund balance, financial policies and planning, and outstanding debt and pension liabilities,” Finance Director Jennifer Charneski.
Bond ratings are important for a town when it comes to borrowing money for one-time expenses, such as for capital projects that cost millions of dollars and are not incorporated in the town’s operating budget. The better the rating, the lower the interest rate the town will get on the bonds, and when dealing with such large amounts of money, the difference in a few percentage points can amount to hundreds of thousands of dollars.
According to an Aug. 21 press release from Moody’s, the rating “reflects the large tax base with extraordinarily high wealth and income levels, which benefits from its proximity to New York City... and other employment centers in Fairfield and Westchester... counties.”
Moody’s also noted that the town is likely to remain financially healthy over the long term “given the town's historically stable operations and management's strong commitment to maintain a sound level of reserves and liquidity.”
“They look at our current data, as well as our trends over the last few years,” Charneski said. “The Aaa rating signifies that the Town has a sound financial position. The Aaa rating makes the Town’s bonds attractive to investors which impacts the interest rate on the bonds. Higher rated issuers enjoy lower interest rates.”