New Canaan Bond Issuance Receives AAA Rating From Moody's

NEW CANAAN, CT — New Canaan's planned issuance of General Obligation Refunding Bonds totaling $9.7 million received a Aaa rating from Moody's Investors Service, First Selectman Kevin Moynihan announced.

Additionally, Moody's still maintains a Aaa rating on the town's outstanding parity debt, and says the town's "outlook is stable." The bonds do not signify new money for the town, but instead is a refinancing of existing debt.

"The Town is very pleased to have Moody's reaffirm its Aaa rating of New Canaan's credit which enables the Town to benefit from historically very low interest rates, thereby saving our taxpayers hundreds of thousands of dollars in annual debt service expense," Moynihan said in an email to Patch.

Officials expect the savings to total about $750,000 over the remaining 10 years of bonds originally issued in 2012 and 2015.

From Moody's statement:

RATINGS RATIONALE
The Aaa rating reflects the town's sizable tax base, extremely strong wealth and income profile and stable financial position. The rating also incorporates the town's low long-term liabilities and manageable fixed costs.

RATING OUTLOOK
The stable outlook reflects the expectation that the town's financial position will remain healthy due to strong management, stable revenues supported by annual tax rate increases and low fixed costs.

FACTORS THAT COULD LEAD TO AN UPGRADE
- N/A

FACTORS THAT COULD LEAD TO A DOWNGRADE
- Significant tax base deterioration and weakening of wealth and income profile
- Substantial operating deficits resulting in draw down of reserves
- Increased long-term liabilities

LEGAL SECURITY
The bonds are general obligations secured by the town's full faith and credit backed by ad valorem property taxes that can be levied without limit as to rate or amount.

USE OF PROCEEDS
Bond proceeds will be used to refund portions of the town's 2012A and 2015 bonds with no extension of maturity.

PROFILE
New Canaan is located in Fairfield County approximately 45 miles northeast of New York City (Aa1 stable). The town is primarily residential and had approximately 20,357 residents as of 2017.

METHODOLOGY
The principal methodology used in this rating was US Local Government General Obligation Debt published in September 2019. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES
For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.