Bangkok--20 Oct--Standard & Poor's
Standard & Poor's Ratings Services raised its underlying rating (SPUR) on Sienna Plantation Municipal Utility District (MUD) No. 3, Texas' parity general obligation (GO) debt to 'BBB' from 'BBB-' based on the district's continued economic expansion and moderating, but still high debt burden.
Standard & Poor's also assigned its 'BBB' SPUR to the district's $6.6 million series 2008 unlimited-tax GO bonds.
The outlook on the ratings is stable.
An unlimited ad valorem tax on all taxable property within the district secures the bonds.
Sienna Plantation MUD No. 3 is part of the 10,500-acre, master-planned Sienna Plantation, 22 miles southwest of Houston, Texas in Fort Bend County.
The district's financial performance has been satisfactory. The unreserved general fund (GF) balance fell from $1.5 million in fiscal 2006 to $1.0 million, or 44% of operations at fiscal year-end 2007, which we consider low. The district also maintained an operating and contingency reserve of $363,000, for a total GF balance of $1.4 million. The total GF balance is estimated to be $1.6 million at fiscal year-end 2008. The debt service fund ended fiscal 2007 with a $3.8 million balance, and is estimated to have ended fiscal 2008 with a $4.0 million balance. This is equivalent to a strong in our opinion 115% of the maximum annual debt service. The district has a 75-cent tax rate and the overlapping levy improvement district has a 49-cent rate. Including all overlapping jurisdictions, the total tax rate is moderate at $2.99 per $100 of assessed value (AV). Property taxes (55%) and service fee charges (29%) account for most general fund revenues.
Management will use bond proceeds to pay developer reimbursements for utility construction costs, to pay capital connection charges to Sienna Plantation Municipal Utility District No. 1, and to retire an existing bond anticipation note.
Complete ratings information is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, 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; select your preferred country or region, then Ratings in the left navigation bar, followed by Credit Ratings Search.
Media Contact:
Edward Sweeney, New York, (1) 212-438-6634
[email protected]
Analyst Contacts:
Russell Bryce, Dallas (1) 214-871-1419
James Breeding, Dallas (1) 214-871-1407