Press Release

Henrico Public Relations, For Immediate Release

Henrico becomes first to earn ‘quadruple AAA’ status for water, sewer bonds

Agencies recently also gave top ratings for Henrico’s general obligation bonds

Henrico County’s AAA ratings for water and sewer revenue bonds – the highest endorsement of its financial management and creditworthiness – have been reaffirmed by independent rating agencies, which now include a fourth company.

As a result, Henrico is the first public utility in the nation to hold “quadruple AAA” status for water and sewer revenue bonds. That means it has received the top ratings from all four of the main municipal rating agencies: S&P Global Ratings, Moody’s Investors Service, Fitch Ratings and Kroll Bond Rating Agency. In August, Henrico became the third county in the nation to receive AAA ratings for general obligation bonds from the four agencies.

“This elite bond-rating status – ‘quadruple AAA’ – underscores Henrico County’s commitment to excellence in fiscal management and leadership in all aspects of governance,” said Board of Supervisors Chair Dan J. Schmitt, of the Brookland District. “These ratings – first with general obligation bonds and now with water and sewer revenue bonds – represent far more than accolades. They translate into lower interest rates and ultimately millions of dollars in savings for our taxpayers as we continue to make strategic investments in facilities and infrastructure that support the county’s high quality of life. These ratings will help us provide tremendous value as we improve and modernize our public utilities system, making it stronger, with enhanced redundancies and resiliency, for all our customers.”

In announcing Henrico’s “quadruple AAA” status for water and sewer revenue bonds, officials noted that AAA status for revenue bonds can be exceptionally difficult to earn because they are backed by a limited funding source, primarily sales of water and sewer service to customers. By comparison, general obligation bonds are supported by a much broader set of funding sources. For Henrico and other localities, that includes real estate and personal property taxes.

Officials also used the news conference at the Water Treatment Facility to provide an overview of its plans to issue $125 million in water and sewer revenue bonds. Among other investments, the bonds will provide initial funding for a $300 million cross-county distribution line that will allow more areas of Henrico to be served by the Water Treatment Facility on Three Chopt Road. Some portions of central and eastern Henrico are currently served exclusively by the city of Richmond’s water treatment plant, under a 1994 water-purchase agreement between the county and city. Those areas were impacted early this year when a power outage knocked the city’s treatment plant offline for several days.

For water and sewer revenue bonds, Henrico became “triple AAA” for water and sewer bonds in 2019, when Moody’s joined the other major rating agencies in assigning an AAA rating to the county. Now, it’s “quadruple AAA,” with newcomer Kroll providing its top assessment of the county’s creditworthiness. S&P Global, Moody’s, Fitch and Kroll have all assigned their ratings of Henrico with a “stable” outlook.

In a summary of its findings, Kroll noted that Henrico’s utilities system continues to see steady growth, with more than 100,000 water customers and nearly that many sewer customers. The customer base also remains diverse, with the 10 largest customers accounting for only 4.1% of total operating revenues.

“The long-term rating reflects the … [system’s] strong financial performance, rate setting autonomy, and provision of highly essential services to a growing service area with favorable demographics,” Kroll said in its rating report. “The service area is characterized by strong per capita income and low unemployment levels relative to the Commonwealth of Virginia.”

Contact: Bentley P. Chan

Director

Henrico County Department of Public Utilities

804-501-4280, bentley.chan@henrico.gov