Bangkok--28 Dec--Standard & Poor's
Standard & Poor's Ratings Services raised its underlying rating (SPUR) on Alameda Community Improvement Commission, Calif.'s series 2003C-2003D tax allocation refunding bonds two notches to 'AA-' from 'A' based on its opinion of the commission's strong coverage and a closed lien. The outlook is stable.
A closed senior lien on tax-increment revenues (relative to series 2003A bonds), including housing set-asides from the business and waterfront improvement project, such as the recently absorbed Exchange Area, secures the bonds. The commission's other project area, the West End community improvement project, is fiscally merged with the business and waterfront improvement project; but it does not support debt service for the series 2003C-2003D bonds.
The rating reflects our view of the following credit factors:
A taxing area centrally located within the San Francisco Bay Area economy; A closed senior lien on pledged revenues, except refunding issues; The commission's moderate taxpayer concentration with the 10 leading taxpayers accounting for 22.8% of incremental assessed value (AV); and
A strong maximum annual debt service coverage of 7.5x
"The stable outlook reflects our assessment of the closed lien, coupled with strong coverage, which we believe will likely provide for good coverage," said Standard & Poor's credit analyst Lisa Schroeer.
Fiscal 2011 assessed value translates into 7.5x senior-lien maximum annual debt service coverage, which Standard & Poor's believes is an important credit strength. The base-to-total assessed value volatility ratio is, in Standard & Poor's opinion, a moderate 0.24, indicating sensitivity in the incremental revenues to assessed value changes. Given the closed lien and strong coverage, however, we calculate that assessed value could lose 66% of its value at the current level of coverage and still maintain 1x maximum annual debt service coverage. According to Urbics, total assessed value, which stands at about $1.2 billion, has grown by an average of 11% since fiscal 2007 with strong growth before 2010 and a slight decline of less than 2% in fiscal 2011.
RELATED CRITERIA AND RESEARCH
USPF Criteria: Special-Purpose Districts, June 14, 2007
Complete ratings information is available to RatingsDirect subscribers on the Global Credit Portal at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
Lisa Schroeer, Charlottesville (1) 434-220-0892
Alda A Mostofi, San Francisco (1) 415-371-5061