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

NEW YORK--(BUSINESS WIRE)--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.

Methodologies

• Public Finance: U.S. Local Government General Obligation Rating Methodology
• Public Finance: U.S. State Annual Appropriation Obligation Rating Methodology
• ESG Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1008753