Bangkok--14 Jan--Standard & Poor's
Standard & Poor's Ratings Services raised its underlying rating (SPUR) to 'BBB+' from 'BBB' on Washington Economic Development Financing Authority's (WEDFA) outstanding economic development revenue bonds (CSC of Tacoma LLC Detention Facility Project). The outlook is stable.
"The raised rating reflects a demonstrated strong demand for the facility -- as evidenced by inmate population trends -- and the expansion projects to the facility, which are being done in response to the federal government's demand for housing detainees at the facility," said Standard & Poor's credit analyst Gabriel Petek. "The rating also continues to reflect the prison industry's inherent risks, including very limited control over revenue generation and exposure to potentially negative media coverage or swings in political climate."
The recent prison population has been very stable and in excess of 925 in each month throughout 2008. At the contract minimum, coverage of maximum annual debt service (MADS) is adequate at 1.14 times(x). However, since recent demand shows typical populations levels to be well above contract minimums, actual coverage of MADS is significantly higher -- often at approximately 2.0x.
The bonds are secured by loan payments made to the WEDFA from the cash flow generated by the financed prison facility.
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 Find a Rating.
Media Contact:
Edward Sweeney, New York (1) 212-438-6643, [email protected]
Analyst Contacts:
Gabriel Petek, CFA, San Francisco (1) 415-371-5042
Paul Dyson, San Francisco (1) 415-371-5079