Top-Tier Ratings Will Deliver Savings to Johnston County Taxpayers

For Immediate Release: May 5, 2026

 

Smithfield, N.C. - Credit-rating firms have given top grades to Johnston County’s next borrowing. “Achieving top-tier credit ratings translates directly into real savings for Johnston County taxpayers through lower interest costs,” said Patrick Harris, Chairman of the Johnston County Board of Commissioners.

“Those savings are possible because this Board has made it a priority to maintain strong cash reserves, and because County Manager Rick Hester and his team continue to demonstrate sound, disciplined financial management.”

The County is issuing $67 million in general obligation bonds that voters approved in 2022 and 2024 for public schools and Johnston Community College. It’s also issuing $129 million in limited obligation bonds to construct a new Clayton High School on the existing campus.

Both S&P Global and Moody’s assigned their highest possible credit ratings to each type of bond. For the general obligation bonds, that’s AAA from S&P and Aaa from Moody’s. Those ratings will secure the lowest possible interest rate when Johnston issues the bonds.

The limited obligation bonds earned AA+ from S&P Global and Aa from Moody’s. Those are also the highest ratings available for that type of borrowing, though the interest rate on the $129 million will be slightly higher than on the $67 million.

The difference in the ratings reflects the difference in the bonds. Voter-approved general obligation bonds are backed by a county’s “full faith and credit,” meaning Johnston County will raise property taxes if necessary to repay the debt. (To date, Commissioners have never had to raise the property-tax rate to retire school debt.)

Limited obligation bonds are secured differently. In the case of the Clayton High project, the County will use the building and grounds as collateral for the loan. The way the credit rating firms see it, the County's general obligation bonds merit the best possible credit rating because the risk of default is negligible. Limited obligations carry a slightly higher risk and, therefore, a slightly lower credit rating.

For a county, a credit rating is similar to an individual consumer’s credit score. Johnston County's strong rating reflects substantial cash reserves and a history of prudent fiscal management.

In assigning its ratings, Moody’s pointed specifically to the County’s “improving reserve position” and “strong management team.” Johnston also benefits from a “growing population coupled with local and regional economic expansion.”

S&P Global said its ratings reflect the firm’s “view that the County’s economic momentum and management practices will continue.”






S&P Global:  AAA General Obligation Bonds (JCPS + JCC Building Projects); A+ Limited Obligation Bonds (Clayton High School Rebuild)

Moody's:  Aaa General Obligation Bonds (JCPS + JCC Building Projects);  Aa Limited Obligation Bonds (Clayton High School Rebuild)