Brunswick County continues to enjoy favorable ratings of its general obligation bonds as well as its limited obligation bonds and certificates of participation, according to an announcement this week from Fitch Ratings Inc.

In its notice to the county, New York City-based Fitch affirmed an AA rating on Brunswick’s $51 million in general obligation (GO) bonds and an AA- rating on its $30 million series 2012 limited obligation bonds  (LOB) as well as its series 2005 certificates of participation (COP).

That equates to a “stable” rating outlook, according to Fitch.

AAA ratings, the highest credit quality, denote the lowest expectation of default risk, Fitch officials say. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

AA ratings signify very high credit quality and denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

The slight ratings difference between GOs' AA and LOBs/COPs' AA- reflects the greater protections in place for general obligation bondholders, Fitch analyst Patricia McGuigan said Wednesday.

“The GO bonds are backed by the county's full faith, credit and unlimited taxing power," she said, adding that COPs and LOBs are payable from lease payments subject to annual appropriation by the county.

Three key factors contributing to Brunswick County’s favorable ratings are its healthy financial profile, low debt burden and affordable carrying costs, according to the analysts, who also liked the fact that the county’s population continues to climb at a “rapid rate” and that the county has a history of conservative budgeting and has strong reserve levels that have remained above the county’s 20 percent policy for almost 20 years.
 
Analysts noted two factors that limit Brunswick County’s economy: its largely residential nature and its strong seasonal component.
 
“Brunswick County is rural and its economy is limited and dependent on tourism, leaving it vulnerable to economic cycles and contributing to seasonal employment fluctuations,” the analysts wrote. The rating analysis noted that Brunswick’s 10 largest taxpayers, which include Brunswick Novant Medical, Dosher Memorial Hospital and Duke Energy, account for less than 10 percent of the county’s tax base.
 
Good management and fiscal prudence, however, help the county maintain its risk-worthiness, the analysis concluded.

“The county is very pleased to have Fitch provide an affirmation of the county’s long-standing record for good business practices and sound fiscal controls,” county manager Ann Hardy said in an email Wednesday.

McGuigan said that North Carolina counties tend to earn strong bond ratings; some even hold AAA ratings. This is due in part, she said, to strong state statutes and state oversight.