Fulton School System Receives Highest Credit Rating

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Sandy Springs, GA -- Moody’s Investors Service has assigned the Fulton County Schools Sytem its coveted Triple A rating (Aaa).

The designation is the highest credit rating available for a government entity, and the first time in history that Fulton County Schools has received the rating.

“Fulton County has worked toward this rating for several years and it’s exciting to have such a respected organization as Moody’s recognize our district for its sound financial management,” said Fulton school board member Gail Dean, one of the school board’s lead proponents for fiscal integrity. “Our previous Aa1 rating already was well respected, but to be named among the top school systems in the nation for our upgraded Aaa credit rating is an achievement we’re extremely proud of. Less than 1 percent of public school systems have this distinction.”

Moody’s upgraded Fulton County Schools from an Aa1 rating to Aaa for its $71.8 million general obligation bonds and $28.5 million revenue bonds, issued through Union City, Georgia, and secured by the district’s absolute and unconditional ad valorem pledge.

The Triple A rating reflects the district’s sizable and diverse tax base, sound reserve position characterized by conservative budgeting and formal financial policies, and a low fixed rate debt burden with a rapid payout (97.1 percent of principal will be repaid within 10 years).

As strengths, Moody’s cited Fulton County Schools’ large tax base that serves as a “regional economic and employment center, historically stable reserve and liquidity positions, manageable debt burden, and the use of Special Purpose Local Option Sales Tax (SPLOST) revenues to provide significant funding for debt service and capital needs,” the system said.

Credit ratings represent the credit worthiness of corporations and government entities. In investment, the credit ratings are published by credit rating agencies and used by investment professionals to assess the likelihood a debt can be repaid.

Ratings play a critical role in determining how much companies and government entities that issue debt have to pay to access credit markets. Ratings determine borrowing costs and the amount of interest they pay on their issued debt.

A credit rating is also an indicator of an organization’s skill and experience with regard to financial operations including budgeting and forecasting, cash management, financial reporting, accounting, and financial management.

The credit rating industry is highly concentrated with the two largest rating agencies, Moody’s Investor’s Service and Standard & Poor’s, having roughly 80 percent market share globally. A similar positive rating from Standard & Poor’s also is expected this year.

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