Bangkok--28 Jul--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'A+' long-term rating, with a stable outlook, to University Place, Wash.'s series 2009A limited-tax general obligation (GO) and series 2009B taxable GO bonds.
The credit strengths of this obligation, in our view, include the city's established economic base with strong-to-extremely strong wealth and income indicators; strong institutionalized policies and practices; and record of maintaining strong available general fund balances during the past five years, supplemented by legally available non-general fund reserves.
Constraining credit quality, in our opinion, is what we consider to be a moderate-to-high debt burden, with additional debt planned in the medium term to support the development of a civic center and retail cluster called Town Center.
The bonds are secured by the city's full faith and credit, subject to a statutory tax limit of $3.375 per $1,000 of assessed value for operations and non-voted debt.
"We believe that higher carrying charges will require careful budgeting to continue the city's record of maintaining a strong financial position," said Standard & Poor's credit analyst Chris Morgan. "Moreover, should a recovery in the real estate market be slow in arriving, we think that the city may need to refinance or use operating reserves to retire a portion of its series 2007B obligations in lieu of sufficient proceeds from land sales."
Located adjacent to Tacoma, University Place serves primarily as a commuter base for 31,440 residents in the large and diverse Seattle regional economy. Its service area was largely developed upon incorporation in 1995, but its total market value has nearly doubled in the past five years to $3.5 billion for 2009, reflecting infill housing and commercial development, combined with a now retrenching rise in residential values.
RELATED RESEARCH
USPF Criteria: "GO Debt," Oct. 12, 2006
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Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Chris Morgan, San Francisco (1) 415-371-5032
Paul Dyson, San Francisco (1) 415-371-5079