Bangkok--1 Jul--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'AA' long-term rating, with a stable outlook, to Flat Head County, Montana's general obligation (GO) bonds series 2009.
The rating reflects our view of the following credit strengths: the county's role as the trade center of northwestern Montana, which includes the city of Kalispell, the county seat; the county's very strong and stable financial performance and reserve levels, in our opinion; additional, available reserves outside of the general fund that could be accessed, if needed; and a low debt burden with no additional bonding plans.
These strengths are tempered by below-average income indicators, as compared with national levels, although considered adequate, in our opinion; rising unemployment rates, at 9.7% as of May 2009; and an economic base historically dependent on manufacturing, wood products and construction, currently experiencing a significant contraction, although the economy is diversifying to include a growing retail, services and medical component.
The bonds are GOs of the county payable from an unlimited ad valorem tax. The bonds are being issued to finance the construction of an emergency coordination center, and to finance the acquisition of land. The bonds represent $6.1 million of a $6.8 million total authorization, with the transaction downsized given the final project budget came in less than originally estimated by the county.
"We expect that financial performance and reserve levels will remain strong, tempering the county's below-average income levels and somewhat limited economic base," said Standard & Poor's credit analyst Paul Dyson. "We also expect limited additional debt needs, which will keep debt levels low."
Flathead County is located in northwestern Montana and has a population of 88,473. The county seat, Kalispell, with a population of 20,298, acts as a service center and also serves as a gateway to the popular Glacier National Park. The county has historically been centered around wood products, manufacturing and construction, but has diversified into services, medical and retail in recent years. Tourism is also a major economic driver, with nearby Whitefish Mountain Resort and Blacktail Mountain both popular ski destinations within 30 miles of the city, and Glacier National Park, just 33 miles north with over 1.8 million visitors in 2008.
RELATED RESEARCH
-- USPF Criteria: "GO Debt," Oct. 12, 2006
-- "Key General Obligation Ratio Credit Ranges — Analysis Vs. Reality," April 2, 2008
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Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Paul Dyson, San Francisco (1) 415-371-5079
Chris Morgan, San Francisco (1) 415-371-5032
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_ [email protected]
Americas Customer Service: (1) 212-438-7280
[email protected]