OREANDA-NEWS. S&P Global Ratings raised its ratings on Upper Freehold Township, N. J.'s general obligation (GO) debt to 'AAA' from 'AA'.

At the same time, we assigned our 'AAA' long-term rating to the township's series 2016GO refunding bonds. The outlook for all ratings is stable.

"The upgrade reflects the township's healthy and improving financial position and very strong reserve levels," said S&P Global Ratings analyst Danielle Leonardis. "We also factored the township's very strong economy and management practices into the rating, which help to mitigate the high combined debt service and pension contribution costs."

The bonds are secured by the township's full-faith-and-GO credit pledge. We understand proceeds from this issue will be used to refund the township's outstanding series 2009 GO bonds. Net present value savings is 5.5% and there are no maturity extensions.

The stable outlook reflects the township's very strong budgetary flexibility and liquidity position. The township's very strong economy and management factor scores further lends stability to the rating. While the township's combined fixed costs are high, in our opinion, the township has historically managed well. Furthermore, the township's debt policy requires the maintenance of level debt service. As such, we do not believe fixed costs will further increase in the near term. Given the many very strong factor scores and the historical ability of the township to manage these high fixed costs, we do not expect to change the rating over our two-year outlook horizon. However, although unlikely in our opinion, if the township were to experience fiscal pressures and use reserves to bridge any imbalances without timely restoration, or fixed costs were to significantly rise, we might lower the rating.