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Holly Springs Chatter

Town receives Aa1 bond rating from Moody's rating service

AA+ and Aa1 are assigned by S&P and Moody's respectively. These scores are given to investment-grade products as they are high-quality. They signify that the issuer is financially sound and has adequate revenues and cash reserves to pay its debts. The risk of default for investors or policyholders is low.

New York, January 11, 2022 -- Moody's Investors Service has assigned a Aa1 rating to the town of Holly Springs, NC's $17.5 million General Obligation Refunding Bonds, Series 2022. Moody's maintains a Aa1 rating on the town's outstanding general obligation unlimited tax (GOULT) debt. The town has $47.7 million in GOULT debt outstanding.

RATINGS RATIONALE

The Aa1 reflects the town's robust financial position, growing tax base with strong wealth and resident incomes, and modest debt and pension burdens.

RATING OUTLOOK

Outlooks are not typically assigned to issuers with this amount of debt outstanding.

FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING

- Significant growth and diversification in the tax base

- Materially lower long term liabilities

FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING

- Significant erosion in a financial position

- Substantial additional debt

LEGAL SECURITY

The GO bonds are secured by the town's full faith and credit, unlimited ad valorem tax pledge.

USE OF PROCEEDS

Proceeds from the GO bonds will be used to refund the town's outstanding General Obligation Refunding Bonds, Series 2006, General Obligation Parks and Recreational Facilities Bonds, Series 2012, and General Obligation Refunding Bonds, Series 2012.

PROFILE

The Town of Holly Springs is located in southwestern Wake County (Aaa stable) in central North Carolina (Aaa stable), approximately 10 miles southwest of Raleigh. The largest industry sectors that drive the local economy are professional/ scientific/technical services, retail trade, and health services. The town's population is approximately 35,000.

METHODOLOGY

The principal methodology used in this rating was US Local Government General Obligation Debt published in January 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1260094. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1288235.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Valentina Gomez
Lead Analyst
REGIONAL_NE
Moody's Investors Service, Inc.
7 World Trade Center
250 Greenwich Street
New York 10007
US
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Tatiana Killen
Additional Contact
REGIONAL_NE
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653