Press Release|Public Finance
KBRA Assigns AA+ Rating to County of Buncombe, NC Refunding Limited Obligation Bonds, Series 2025; Affirms AAA Rating for Outstanding GO Bonds and AA+ Rating for Limited Obligation Bonds
20 Mar 2025 | New York
KBRA assigns a long-term rating of AA+ to the County of Buncombe, NC Refunding Limited Obligation Bonds, Series 2025. KBRA additionally affirms the long-term ratings of AAA for the County's outstanding General Obligation Bonds and AA+ for the County's outstanding Limited Obligation Bonds.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- State and Federal assistance is expected to cover most Helene related costs.
- Strong financial reserves and liquidity at FYE 2024 provide important financial resources with which to manage the post-Helene disaster recovery.
- Favorable trend of economic development preceding Helene and fast initial post-storm recovery in retail sales activity and unemployment signal that the area economy is recovering well so far.
- Conservative debt and additional continuing obligations profile is characterized by a low direct and overlapping debt burden, well-funded pensions, and very affordable fixed costs relating to debt service, pensions, and OPEB.
Credit Challenges
- Estimates of the magnitude and timing of Helene-related costs, revenue impact, and State and Federal assistance are still evolving.
- Full and timely reimbursement of eligible disaster-related costs could be delayed or in some cases denied due to administrative and other requirements.
- Financial reserves and liquidity are anticipated by management to be sufficient to weather the recovery, but are expected to be drawn down this year.
Rating Sensitivities
For Upgrade
- Not applicable given AAA rating level for GO.
For Downgrade
- Sharp drawdown in reserves and liquidity beyond the levels forecast by management to a level no longer consistent with the rating level.
- Weak or incomplete economic recovery resulting in sustained revenue challenges for the County.Failure to articulate a plan for timely reserve and liquidity replenishment as the disaster recovery progresses.
To access ratings and relevant documents, click here.