Town of Hilton Head Island earns S&P AAA credit rating

The Town of Hilton Head Island has been awarded a AAA rating—the highest possible credit rating—from S&P Global Ratings for its outstanding general obligation bonds. This upgrade, from AA+, underscores the Town’s strong financial management practices, well-structured fiscal policies, and commitment to long-term capital planning.

In addition to the AAA GO bond rating, S&P upgraded the Town’s special obligation bonds, backed by beach preservation and hospitality fees, to AA+ from AA, citing improved reserve levels and prudent debt management.

“These higher credit ratings are a clear endorsement of the responsible fiscal path we’ve taken as a community,” said Mayor Alan Perry. “They reflect not only our strong financial stewardship but also the hard work and dedication of our Town Manager and staff. This achievement puts us in a stronger position to invest in the future of our town while continuing to deliver high-quality services our residents expect and deserve.”

“These ratings validate the strength of our financial foundation and our focus on operational efficiency, risk mitigation, and strategic investment,” said Marc Orlando, Town Manager. “This achievement directly supports our ability to reinvest in infrastructure, resilience, and quality services while saving taxpayer dollars through reduced borrowing costs. I commend our Town Council for their fiscal vision and disciplined policy leadership.”

With this rating, Hilton Head Island becomes one of only two municipalities in South Carolina—alongside the City of Greenville—to earn AAA ratings from all three major rating agencies: S&P Global Ratings, Fitch Ratings, and Moody’s Investors Service. This AAA status places the Town among a select group of financially elite local governments nationwide.

According to the Government Finance Officers Association (GFOA), a AAA rating enhances a municipality’s ability to:
• Secure financing at the lowest possible interest rates.
• Attract private investment by signaling financial stability.
• Demonstrate transparency and accountability to residents, businesses, and investors.
• Maintain flexibility to respond to economic changes, emergencies, or growth opportunities.

“These ratings reduce our cost of capital and reinforce public trust in how we manage taxpayer resources,” Orlando added. “They’re a direct reflection of our professional staff, conservative financial culture, and long-term vision for our community.”

In its assessment, S&P cited the following credit strengths:
• Substantial reserve growth in multiple key funds, including the General Fund, Disaster Recovery Fund, and Beach Preservation Fee Fund, as a result of revised financial policies.
• Very low debt burden relative to revenues, which compares favorably to other AAA-rated municipalities.
• Well-established financial practices, including multi-year forecasting, conservative revenue assumptions, and structurally balanced budgets.
• High economic metrics, including elevated household income levels and market value per capita, even in the context of a tourism-driven local economy.

“The ‘AAA’ rating reflects our view of the town’s history of operating surpluses, which have raised reserve levels to well above those of its peers,” S&P stated in its announcement. “We believe the town’s conservative budgeting practices, very high household and per capita incomes, and well-embedded management policies support the rating.”

Residents and stakeholders are encouraged to view the full ratings report and methodology at hiltonheadislandsc.gov.