KBRA assigns a long-term rating of AAA to the County of Buncombe (the "County") Taxable General Obligation Bonds, Series 2024. Concurrently, KBRA assigns a long-term rating of AA+ to the County's Limited Obligation Bonds, Series 2024B. The Outlook is Stable.

The long-term rating assignment to the County's Taxable General Obligation (“G.O.”) Housing Bonds, Series 2024, reflects the County’s diversifying local economy, growing employment base, robust tax base underpinning elevated resident property wealth metrics, sound financial policies and procedures supporting the maintenance of strong available governmental reserves and direct liquidity, and a manageable fixed cost burden. Counterbalancing the aforementioned strengths are what KBRA considers to be moderate resident income metrics when measured relative to similarly-rated credits.

The long-term rating assignment to the County’s Limited Obligation Bonds (“LOBs”), Series 2024B, reflects the nature of the annual appropriation pledge backing the timely repayment of principal and interest on the LOBs. The rating is derivative of the County’s G.O. rating determinants, balanced against the inherent risk of non-appropriation.

The Stable Outlook reflects KBRA’s expectation that continued economic development will support growth and diversity within the County’s economic, employment, and taxing bases. The Outlook further reflects the County’s favorable financial performance and position, which is supported by what KBRA considers to be conservative policies and procedures.

Key Credit Considerations

The ratings were assigned because of the following key credit considerations:

Credit Positives

• Growing and diverse tax base, coupled with historically-strong current collections of ad valorem tax revenues.
• Sound financial policies and procedures, supporting both favorable operating performance and the maintenance of strong available reserves and direct liquidity.
• Manageable overall net debt burden, coupled with limited debt-funded capital needs presently forecast over the outlook horizon.

Credit Challenges

• Moderate dependence on economically-sensitive sales tax revenues, which account for 22.3% of governmental revenues, coupled with per capita resident incomes that represent approximately 94% of the national figures.
• LOB funding commitment subject to County appropriation.

Rating Sensitivities

For Upgrade:

• Not applicable for the current rating.

For Downgrade:

• A material contraction in the County’s taxing base, thus limiting financial flexibility and potentially depleting reserves to levels no longer commensurate with the rating category.
• An unexpected spike in direct or overlapping debt obligations, increasing overall net debt metrics substantially higher.

To access rating and relevant documents, click here.

Click here to view the report.

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

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

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) is a full-service credit rating agency 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 by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1004111

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