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Morris (County of) NJ -- Moody's assigns Aaa to Morris County Improvement Authority, NJ's county-guaranteed bonds; outlook stable

·12 min read

Rating Action: Moody's assigns Aaa to Morris County Improvement Authority, NJ's county-guaranteed bonds; outlook stable

Global Credit Research - 12 Jan 2021

New York, January 12, 2021 -- Moody's Investors Service has assigned Aaa ratings to Morris County Improvement Authority, NJ's $8.9 million County of Morris Guaranteed Pooled Program Refunding Bonds, Series 2021A (Rockaway Borough Project) and $24 million County of Morris Guaranteed Pooled Program Refunding Bonds, Series 2021B (Pooled Refunding Project) (Federally Taxable). Moody's maintains the Aaa rating on the county's outstanding general obligation unlimited tax (GOULT) and guaranteed debt. The outlook is stable.

RATINGS RATIONALE

The Aaa rating reflects the county's substantial tax base, strong and diverse economy, healthy reserve levels, and modest debt burden. The rating also reflects a long trend of strong, proactive financial management.

Although the pandemic has had a negative impact throughout the state, Morris County's credit quality has not been impacted. The county created a Covid-19 Strategic Planning Committee which meets regularly and has implemented a variety of measures to reduce the impact. The county's largest revenue, property taxes, is guaranteed by its constituent municipalities.

RATING OUTLOOK

The stable outlook reflects our expectation that the county's financial position will remain strong over the near term and that the county will continue to benefit from its substantial and diverse tax base and above-average wealth levels.

FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS

- Not applicable

FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS

- Unanticipated tax base contraction

- Weakening of reserves and liquidity

LEGAL SECURITY

The bonds are ultimately secured by the county's general obligation unlimited tax pledge via the provisions of a county guaranty. Under the guaranty, the county shall be unconditionally and irrevocably obligated to levy ad valorem taxes for the payment of debt service, without limitation as to rate or amount.

USE OF PROCEEDS

Proceeds from the 2021A bonds will be used to permanently finance the Borough of Rockaway's $9.8 million notes and to provide $782,000 in new money for various capital projects. Proceeds from the 2021B bonds will be used to advance refund all or a portion of the County of Morris Guaranteed Pooled Program Bonds, Series 2011, Series 2012A, and Series 2012B for interest cost savings. There will be no extension of maturities.

PROFILE

Morris County is located in northern New Jersey (A3 negative) about 25 miles west of New York City (Aa2 negative). It is one of the wealthiest counties in the country.

METHODOLOGY

The principal methodology used in these ratings was US Local Government General Obligation Debt published in July 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1230443. An additional methodology used in these ratings was Rating Transactions Based on the Credit Substitution Approach: Letter of Credit-backed, Insured and Guaranteed Debts published in May 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1068154. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004

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.

Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.

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.

Douglas Goldmacher Lead Analyst Regional PFG Northeast Moody's Investors Service, Inc. 7 World Trade Center 250 Greenwich Street New York 10007 US JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Valentina Gomez Additional Contact Regional PFG Northeast JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653

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