S&P: Raritan Township, NJ GO Debt Rating Raised To 'AA+' On Improved Finances
The rating action reflects S&P Global Ratings' opinion of the township's improved financial performance, reserves, and liquidity.
At the same time, S&P Global Ratings assigned its 'AA+' rating and stable outlook to the township's $6.441 million series 2016 GO general improvement bonds.
"We do not expect to change the rating within the outlook's two-year period. Over time, however, if Raritan were to continue its strong budgetary performance, leading to an increase in reserves while mitigating long-term liabilities, and if management were to strengthen its formal policies and procedures, we could raise the rating," said S&P Global Ratings credit analyst Steven Waldeck. "While currently unlikely, if budgetary performance were to deteriorate significantly, leading to diminished reserves, we could lower the rating."
The stable outlook reflects S&P Global Ratings' opinion that Raritan will likely continue its strong budgetary performance and maintain its strong reserves. The rating service believes Raritan's participation in the broad and diverse New York-Newark-Jersey City metropolitan statistical area provides additional rating stability.
The township's full-faith-and-credit pledge secures the GO bonds.
Officials plan to use series 2016 bond proceeds to refund the township's GO bond anticipation notes, as well as approximately $1.6 million to finance various capital improvements.