Henrico, Chesterfield officials celebrate ‘quadzilla’ status

Only three counties in the nation have achieved a quadruple-AAA bond-rating status, and two of them call Metro Richmond home.

On Tuesday, officials from Henrico County joined some of their Chesterfield County counterparts and other regional officials at Richmond International Airport to celebrate Henrico’s quad-AAA rating, which became official days ago.

The announcement came several months after Chesterfield became the nation’s second quad-AAA-rated locality, creating what Henrico County Manager John Vithoulkas jokingly termed a “quadzilla region.”

Both counties had for years enjoyed triple-AAA ratings on their general obligation bonds – meaning that each of the three major bond rating agencies (S&P Global Ratings, Moody’s Investors Service and Fitch Ratings) had reviewed their financial management and determined that they had demonstrated the highest level of credit worthiness.

This year, ahead of planned general obligation bond sales, both localities also invited scrutiny from a fourth firm – Kroll’s Bond Rating Agency, which recently was recognized by the U.S. Federal Reserve as a major rating agency of municipalities. KBRA issued each its own AAA rating.

The sterling ratings signal to potential investors that buying G.O. bonds from either locality is a low-risk endeavor. They also provide the localities with the lowest interest rates on the market, saving them debt and saving their taxpayers millions of dollars.

“This recognition puts both Chesterfield and Henrico in rarified air,” Schmitt said. “It goes without saying that having two of the nation’s three counties with quadruple triple-A bond-ratings here in Central Virginia is a good thing. It showcases our region, it showcases our residents and our businesses, and it shows that Central Virginia is leading the way nationally and in our state.

“This reverberates around the region.”

At a time when Richmond International Airport is seeing record-high traveler totals and planning some major enhancement projects, and when the region’s tourism and sports tourism industries are thriving, the quad-AAA status for both localities is another feather in the region’s cap, Schmitt said.

“A quadruple triple-A bond rating doesn’t exactly roll off the tongue. . . and at first glance, it may not get everyone’s pulse rating when you’re talking about bond ratings, but it has real-world impacts for our residents and our businesses.”

He compared the rating to a person with a sterling credit rating of 850.

“It makes that person’s financial life smoother, easier to borrow money, and they get the very best rates on the market,” he said.

Harris County, Texas, is the other county with a quad-AAA rating among the nation’s 3,000-plus counties.

Henrico is planning to issue $88 million in G.O. bonds next month to help fund eight projects authorized by voters during the county’s 2022 bond referendum:

• the construction of a new version of Quioccasin Middle School ($60 million in funding from the planned bond sale);

• new drainage improvements ($7.5 million);


• the renovation of Johnson Elementary School ($5 million);


• the renovation of Jackson Davis Elementary School ($4.5 million);


• the replacement of Longan Elementary School ($4.5 million);


• the construction of a new animal adoption center in Short Pump ($2.7 million)


• the construction of Tuckahoe Creek Park Phase III ($2.5 million);


• the construction of Henrico Schools’ Environmental Education Center in Varina ($1.3 million).

Separately, the county intends next month to issue a total of $42.5 million worth of Economic Development Authority revenue bonds to help fund two projects:

• the construction of a new Social Services building ($33.5 million in funding from the planned bond sale);


• the replacement of its financial system ($11.5 million).

EDA bonds for any locality are rated at least one “notch” lower on the bond-rating scale than are G.O. bonds from the same locality, simply because they are viewed as having a slightly higher degree of investor risk. The rating agencies have issued AA+ ratings for Henrico’s EDA bonds.

In issuing its G.O. bond ratings, Kroll cited Henrico’s strong financial standing and local economy, praising the county’s “robust financial policies and procedures that have enabled continued growth in the unassigned fund balance and strong levels of liquidity, while still allowing for taxpayer rebates; a relatively low fixed cost burden; and a diverse economic base with favorable socioeconomic characteristics.”

The county’s new status is a tribute to the efforts of all of its employees across all agencies and departments, Schmitt said.

“This is a product of Henrico’s determination to put people first and do the people’s business correctly,” he said. “The residents and businesses that call Henrico County home can be confident that they live and work in one of the very best managed localities in the country.”