EBENSBURG - Cambria County Commissioners announced Thursday the first steps toward attaining a better credit rating and saving upward of $3 million in debt refinancing.
The county's credit rating has been upgrading gradually over the last decade through the New York-based Standard & Poor's credit-
rating service; it went from the noninvestment BB rating in 2005 to BBB- about four years ago.
President Commissioner Douglas Lengenfelder didn't want to say how far the county could climb but said he's optimistic.
"It would be nice to show the rest of the world that Wall Street believes our county is advancing," he said. "I do believe we're going to beat BBB-."
According to the Standard & Poor's website, BBB- is considered the "lowest investment grade by market participants." Even moving one step up to BBB would mean the county has "adequate capacity to meet financial commitments" although it's still considered to be "more subject to adverse economic conditions." The county approved two agreements: up to $27,000 with Florida-based Catlin Financial Services LLC to help the county work toward an eventual S&P rating and up to $40,000 for legal services through the Pittsburgh-based attorneys group Eckert Seamans.
Lengenfelder said it would cost an additional $25,000 or so to get the credit rating through Standard & Poor's.
He said these steps could help the county save between $2.5 million and $3.2 million in debt refinancing without having to extend repayment.
And while a better rating also is more attractive to investors, Lengenfelder said that's not the main goal.
"It isn't that we're looking for more money; we're looking for savings of money so that we can pay off these debts quicker or create more cash-flow without extending the debt or taking on more debt," he said. "We don't want the generations that are going to follow us to be paying for us."
In a rare moment of agreement, county Controller Ed Cernic Jr. said the county should be seeking a better rating. But, he said, it would have worked out better if commissioners had moved on the issue earlier.
He said the county has payments it's set to make within the next couple of weeks, and he doesn't think there will be a new rating by then.
"We need to refinance our debt. There's no question about that," he said. "But I gave them a proposal six, nine months ago."
Lengenfelder disagreed that Cernic's proposal would have been a better option; rather, it would have cost more money in the long run "by orders of magnitude" of over a half-million dollars, he said.
Mirror Staff Writer Kelly Cernetich is at 946-7520.