Bangkok--17 Jun--Standard & Poor's
Standard & Poor's Ratings Services affirmed its 'AA+' rating on Glendale, Ariz.'s series 14 and 16 certificates of participation (COPs) and its 'AA' rating on Western Loop 101 Public Facilities Corp.'s third-lien excise-tax revenue bonds, issued for the city and removed the ratings from CreditWatch, where they were placed with negative implications Feb. 24, 2011.
The removal from CreditWatch on these bonds follows city officials' representation that there are no plans for significant additional parity debt on these liens at this time. The outlook on the bonds is stable.
At the same time, Standard & Poor's affirmed its 'AA+' long-term rating, and stable outlook, on Glendale Municipal Property Corp., Ariz.'s first-lien excise tax revenue bonds.
The ratings reflect what we view as the city's:
- Participation in the diverse Phoenix metropolitan statistical area (MSA);
- Strong maximum annual debt service (MADS) coverage on all liens; and
- Good bond covenants, including a 3x additional bonds test (ABT) for the first-lien debt and a 2x ABT for the second-lien and third-lien debt.
"The stable outlook reflects our expectation that good bond covenants, no plans for significant additional debt, and the city's diverse sales tax base will continue to contribute to strong MADS coverage, despite recent declines in pledged revenue," said Standard & Poor's credit analyst Sussan Corson. "Should debt issuance or declining trends in pledged revenue materially weaken currently strong MADS coverage, we could lower the ratings," Ms. Corson added.
Mitigating factors in our opinion include the city's declining pledged revenue trends.
A first-lien pledge of the city's excise, transaction privilege, franchise, and income tax revenues secure the excise tax revenue bonds. The series 14 and 16 COPs represent an interest in rental payments made by Glendale under a lease agreement between the city and Glendale Municipal Property Corp. The rental payments are payable from, and secured by, a second-lien on the city's unrestricted excise tax revenue. The third-lien excise tax revenue bonds, issued for the city, are payable from rental payments by Glendale under a lease agreement with the city's Western Loop 101 Public Facility Corp. The rental payments are secured by a third-lien on the city's unrestricted excise tax revenue.
The 57-square-mile city of Glendale is in Maricopa County in the northwest portion of the Phoenix MSA, nine miles from downtown Phoenix.
RELATED CRITERIA AND RESEARCH
USPF Criteria: Special Tax Bonds, June 13, 2007
Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.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:
Edward Sweeney, New York (1) 212-438-6634,
[email protected]
Analyst Contacts:
Sussan Corson, New York (1) 212-438-2014
Alda A Mostofi, San Francisco (1) 415-371-5061