SC - Climate change may hurt Hilton Head’s ability to borrow money for projects, report says
The changing climate won’t only erode Hilton Head Island’s beaches and flood its neighborhoods. Bond rating agencies say climate change also may hurt the local government’s ability to borrow money.
Moody’s Investors Service and Standard & Poor’s, two of the three agencies that rate the Town of Hilton Head Island’s financial health each year, listed rising sea levels as one of their top concerns for the town, according to a presentation last week by the town’s finance director.
“Assuming all other credit factors remain stable, we could raise the rating if the town incorporates more comprehensive planning for potential weather-related impacts into its long-term capital and financial planning, given the town’s coastal location and tourism industry presence,” Standard & Poor’s wrote in its 2020 report, encouraging the town to plan more seriously for the effects of climate change.
The focus on potential environmental changes is new for Moody’s and Standard & Poor’s, town finance director John Troyer said. If Hilton Head’s bond ratings were to fall, it would get more expensive for the government to borrow money because the town would pay more in interest on each loan.
“It would be more expensive every time we go to the bond market,” he said. “Every dollar we spend in interest is money we can’t spend on roads, pathways, (and) parks. So everything that we can save on an interest payment is good for the town.”