Bangkok--3 Feb--Standard & Poor's
Standard & Poor's Ratings Services raised its rating three notches to 'AA+' from 'A+' on the Tucson-Pima County Industrial Development Authority, Ariz.'s $5.825 million taxable series 2005 junior-lien excise tax revenue bonds, issued for the Rio Nuevo Multipurpose Facilities District's Fox Theatre project. The outlook is stable.
"The raised rating reflects the closure of the 2005 senior (unbonded against) and junior liens (these bonds) and extremely strong debt service coverage of 20.0x for fiscal 2007, estimated at 17.3x for fiscal 2008, which we also believe is extremely strong," said Standard & Poor's credit analyst Paul Dyson.
Given fiscal 2007 revenues of $16.2 million, coverage of senior 2005 obligations was 20x, declining to 17.3x given estimated fiscal 2008 revenues of $14.0 million. Although the district has historically exceeded projections and growth has been strong, sensitivity in retail spending patterns to economic downturns or other macroeconomic events, such as in 2008 and early 2009, could lead to further weakening of DSC. Should revenues decline 22.5% in 2009, coverage would fall to 13.4x, although still considered extremely strong.
The bonds are secured by a junior-lien pledge of state transaction privilege tax revenue increments over the fiscal 2000 base-year level that the district is entitled to receive pursuant to Section 42-5031 of the Arizona Revised Statutes. Total state transaction privilege tax increment revenues increased to $16.2 million in fiscal 2007 from $5.1 million in fiscal 2004, an annual growth rate of 47%.
The district, a component unit of Tucson, is a tax-levying public improvement district that was formed in July 1999 by Tucson and South Tucson to develop the Rio Nuevo project in Tucson. Tucson has a population of roughly 541,132 and its broad-based economy is centered on tourism, retail, military, government, and various high-tech and health care employers.
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Media Contact:
Edward Sweeney, New York (1) 212-438-6634, [email protected]
Analyst Contacts:
Paul Dyson, San Francisco (1) 415-371-5079
Matthew Reining, San Francisco (1) 415-371-5044
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_ [email protected]
Americas Customer Service: (1) 212-438-7280
[email protected]