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Los Angeles County Achieves Highest Credit Ratings From Two Major Ratings Agencies

Los Angeles County Achieves Highest Credit Ratings From Two Major Ratings Agencies 685 150 COUNTY OF LOS ANGELES

June 12, 2024

Los Angeles County Achieves Highest Credit Ratings From Two Major Ratings Agencies

Fitch Ratings has raised the County’s long-term issuer credit rating to AAA from AA+, garnering the highest possible credit rating available in the financial markets. Following a series of meetings with ratings agencies, the County also maintained its long-term ratings of AAA and Aa1 from S&P Global Ratings and Moody’s, respectively. This is a significant achievement, as only four other California counties are currently rated AAA by Fitch and S&P, and reflects the County’s broad economic base and fiscal discipline.

The Fitch credit rating upgrade was provided in connection with the County’s issuance of its 2024-25 $700 million Tax and Revenue Anticipation Notes offering, which priced this week at 3.25%. The three credit agencies assigned the highest short-term ratings to the County’s Notes issuance.

Higher investment grade ratings allow the County to attract a broader group of bond buyers and price its debt at a lower rate, saving millions of dollars in interest payments on behalf of taxpayers.

Based on a credit review under Fitch’s new U.S. Public Finance Local Government Rating Criteria, the County received high marks for its economic strength, stable tax base, and strong budgetary management and governance practices, leading to the AAA rating upgrade.

Government credit ratings are similar to consumer credit scores. The County’s status as a low credit risk means the interest rate it pays to borrow money is lower than it would be otherwise, thus providing flexibility and security in funding vital services for the County’s constituents. When the County obtains a low-interest rate loan, all County residents benefit.

“Our AAA credit ratings from Fitch and S&P, and Aa1 credit rating from Moody’s demonstrates that Los Angeles County’s fiscal health is strong,” said Lindsey P. Horvath, Chair of the Los Angeles County Board of Supervisors, who represents the Third District. “All levels of County leadership are focused on prudent financial planning and economic resiliency, while also providing and strengthening essential services for our communities.”

“The County’s AAA rating is testament to the Board of Supervisors’ commitment to establish a solid financial foundation to ensure we deliver County services fairly and responsibly, particularly to those who are most vulnerable and in need, especially coming out of the COVID pandemic,” said Supervisor Hilda L. Solis, who represents the First District. “This diligence has helped ensure we have sufficient funding to preserve the vital services and support County residents and businesses depend on right now and that we are prepared to meet future, unexpected challenges.”

“Achieving the highest credit rating is a hard-earned accomplishment for the County that will benefit the millions of residents who rely on us to deliver services and resources effectively,” said Supervisor Holly J. Mitchell, who represents the Second District.

“This credit rating reflects our commitment to managing taxpayers’ dollars responsibly and prudently even while tackling head on the challenges people are facing and some of the most difficult crises of our time,” said Supervisor Janice Hahn, who represents the Fourth District.

“I am proud of Los Angeles County’s robust credit rating,” said Supervisor Kathryn Barger, who represents the Fifth District. “I have worked hard to make prudent financial decisions, including being watchful of debt limits, investing in infrastructure, and ensuring we continuously save into our Rainy Day Fund to keep the County fiscally solvent. As a fiscal enterprise, Los Angeles County remains fundamentally strong and prepared to continue serving as the public’s safety net.”

“L.A. County is a major State and national economic driver. We continue to exhibit fiscal discipline and resilience through different economic cycles, while providing essential services to our nearly 10 million residents,” Chief Executive Officer Fesia Davenport said.

The announcements came after the County’s annual meeting with each of the three agencies on May 30, 2024. The County was represented by Board Chair Horvath, as well as the Chief Executive Officer, Treasurer and Tax Collector, Auditor-Controller and Director of the Department of Health Services.

“These ratings reflect the work of the County family and Board’s outstanding fiscal leadership,” said Treasurer and Tax Collector Elizabeth Buenrostro Ginsberg. “It is gratifying to see the County’s longstanding budgetary stewardship recognized by the ratings agencies.”

Contact: Daniel Wiles, Assistant Treasurer and Tax Collector over Public Finance and Investments

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