Lower Merion Receives Rare Triple-A Credit Rating

LOWER MERION, PA -- Moody’s Investors Service and Standard & Poor’s (S&P) have both reconfirmed Lower Merion Township’s Triple-A Bond Credit Rating - the highest rating attainable, according to a press release from the township.

The rating from S&P reflects its opinions of the township’s “very strong” economy; management; and budgetary performance, flexibility and liquidity, the company said in its detailed report, the release states.

The Township said they held a successful and competitive bond sale on Wednesday, April 6, to refinance approximately $3.81 million of its current outstanding bonds at overall lower interest rates. Budgetary debt savings are estimated at approximately $174,000, net of all issuance costs. In addition, approximately $7.5 million in new money bonds are being issued on May 4, 2016 to fund a portion of the township’s Capital Improvement Program.

Moody’s cited Lower Merion’s large “tax base, strong financial position, modest debt burden, and actuarially over-funded pension plan,” and said its stable outlook “incorporates the township’s long-term planning and policies, which will ensure a strong financial position even if the township undergoes planned draws from reserves for the next few years.”

“Maintaining the township’s high credit rating is critical in today’s economy,” said Eric Traub, chief financial officer. “We are pleased that many financial institutions continue to view Lower Merion as a dependable, stable community, and that they respond to our bond sales with very competitive interest rates.”

Traub led presentations by township management and financial advisor public management (PFM), which included recent conference calls with Moody’s and S&P. “In awarding the double Triple-A, the rating agencies again cited the Township’s deep and diverse property tax base, positive revenue performance, expenditure savings and sound long-term planning,” said Ernie McNeely, township manager.

“We view the township’s management as very strong, with strong financial management policies and practices,” S&P noted in its report. It “employs conservative budgeting practices with revenue often exceeding budgeted figures.”

“There are very few municipalities with triple-A ratings on its bonds, let alone from two rating agencies,” said Commissioner Brian McGuire, chair of the Finance Committee of the Board of Commissioners. “This is now our strong tradition here, but it is one that we work very hard to maintain each year. I congratulate Director Traub and his terrific Finance Department staff, as well as the fiscal leadership of my fellow commissioners.”

Lower Merion Township is the only municipality in Pennsylvania and one of only five townships in the United States with a Triple-A credit rating from both of the largest rating agencies.

In addition to the noteworthy distinction, the Township’s “double Triple-A” status allows it to borrow at the lowest possible interest rates the market will bear, translating to tangible savings for the township.