West Deptford Gets Good News on Credit, Bond Ratings
Standard & Poor's rated the township and the soon-to-be-sold refunding bonds as A-/Stable.
West Deptford got solid financial news this week, after one of the major credit ratings agencies gave a solid rating this week to $31.4 million in bonds to pay off settlements with Sunoco and El Paso on property taxes at Eagle Point.
Standard & Poor’s assigned an A-/Stable rating on Aug. 6 on the bonds, which could go on the market as early as next week, putting them in the middle of what the rating agency deems investment-grade bonds, while also affirming the township’s underlying credit rating, also an A-/Stable.
It all adds up to a conclusion the township is headed in the right direction, local officials said.
“This doesn’t look like much, but it’s a very big deal for the township,” administrator Eric Campo said during a presentation at Thursday night’s township committee meeting. “This eliminates a very big cloud.”
It also means a lower interest rate when the bonds go up for sale, Campo said, which is huge in the long term.
“This will save the township hundreds of thousands of dollars over the life of these bonds,” he said.
And the overall rating getting affirmed and listed as stable is meaningful for when the township wants to refinance current bonds, potentially at a lower rate, treasurer Richard Giuliani said.
“It could mean a lot of money,” he said.
At the same time, the ratings agency left open the possibility of the township’s overall rating improving in the future, which Mayor Ray Chintall said is an even bigger victory.
“The average resident may not see that, but in the long haul, it’s extremely important,” he said. “I think it’s a compliment to the entire administration.”
That’s something the township will have to justify over time, but Campo said getting the budget on stable footing—most of the budget this year, excluding debt service, was flat—was a big step.
“We’ll certainly be pushing for that (rating),” Campo said.
And besides the long-term savings and potential for improvement in the rating, Chintall said the financial news can also help West Deptford be more attractive to businesses. He specifically cited the resolution on the Eagle Point tax appeals as a major factor that should help as the township tries to attract new development and businesses.
“The Sunoco thing was really dragging us down,” he said. “Once you hear the word ‘stable,’ it’s huge.”
To that end, Chintall’s been in preliminary talks with businesses about some of the available properties around West Deptford, including the old Huntsman property on Mantua Grove Road and the former Parkway drive-in on Old Crown Point Road.
“Hopefully now it’ll boost up our market,” Chintall said.
Though the township’s tax base took a hit from the Sunoco settlement, the overall balance between commercial, industrial and residential properties is fairly well-balanced, something the credit ratings agencies look for in determining the township’s credit rating, Campo said.
“It’s a good mix,” he said. “We’re not overly dependent on any one taxpayer.”