New York, June 23, 2025 -- Moody's Ratings (Moody's) has upgraded Gloucester County, NJ's issuer, general obligation (GO), and GO-backed guaranteed ratings to Aaa from Aa1. We have also assigned a Aaa to the county's $24 million County Guaranteed Solid Waste Revenue Bonds (Cell Expansion Projects), Series 2025. The County had around $332 million in total debt outstanding at the end of 2024. The outlook has been revised to stable from positive. Click here for: Moody's Credit Opinion.
The upgrade to Aaa reflects the county's continued strong financial performance which aligns with peers in the rating category and which is expected to remain healthy in the near-term. The county's revenue steam is very reliable as it is mostly property tax dependent and is guaranteed in full annually. This provides stability for operations along with a hedge in economic downturns. The economy continues to see growth and leverage, while above-average, is affordable. The county does not have material direct exposure to federal government policy changes.
RATINGS RATIONALE
The Aaa issuer rating reflects the county's large and growing local economy in southern New Jersey (A1 positive). The local economy benefits from the presence of various higher education and health care institutions including Rowan University (A2 stable). The county continues to see expansion in its commercial and industrial base and residential development is steady. Assessed values are increasing at a strong pace. Resident income and wealth levels are strong. The county does not have material direct exposure to federal government policy changes.
The county's reserve position is at all time highs at the end of fiscal 2024 at around 36% of revenues. Over the past several years, the county has focused on increasing reserves through consistent revenue growth and controlling expenditures through various way including shared service agreements. Fiscal 2025's budget does include and project a modest decline in reserves of only $6 million (its budget is around $300 million). The county's management team maintains a financial forecast through 2029 which shows a return to fund balance growth after 2025. The county benefits from a very reliable revenue stream in its property tax levy that supports a majority of operations. Liquidity remains extremely strong at 57% of revenues.
Leverage is above-average but is affordable. Its long-term capital needs are largely routine in nature and the county's debt plans will not significant increase in the coming few years. Around 30% of the county's debt burden is related to debt the county has guaranteed. It has never had to pay out on that debt in the past.
The Aaa on the county's GO and GO-backed guaranteed debt reflects the unlimited ad valorem pledge to support the bonds, either directly or via a guarantee agreement.
RATING OUTLOOK
The stable outlook reflects the expectation that the county's local economy and reserves (after 2025) will continue to see modest annual growth while leverage remains affordable.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
- Decline in reserves to below 25% of revenues
- Increase in leverage to above 350% of revenues
- Any significant contraction in economic trends
PROFILE
Gloucester County is located in southwestern New Jersey, bounded on the northwest by the Delaware River and the Pennsylvania state line, just south of Philadelphia.
METHODOLOGY
The principal methodology used in the issuer, general obligation, and dependent ratings was US Cities and Counties published in July 2024 and available at https://ratings.moodys.com/rmc- documents/425429. An additional methodology used in the dependent ratings was Guarantees, Letters of Credit and Other Forms of Credit Substitution Methodology published in July 2022 and available at https://ratings.moodys.com/rmc-documents/386295. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of these methodologies.
REGULATORY DISCLOSURES
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Susanne Murray
Lead Analyst
Orlie Prince Additional Contact
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