Bangkok--7 Sep--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'A+' long-term rating to the League of Oregon Cities Cooperative Asset Financing Program series 2009B certificates of participation (COPs), issued on behalf of the city of Newport, Ore. At the same time, we affirmed the 'A+' underlying rating (SPUR) on Newport's series 2009A and 2009B general obligation (GO) bonds.
In our opinion, the rating reflects a still strong property tax base, with assessed value (AV) growth in 2009; an economy closely tied to the fishing- and tourist-based industries; a recently improved financial position, with a strong ending fund balance as a percent of expenditures in fiscal 2008; and a moderate to high debt burden, with no short- or medium-term plans for additional debt.
"The stable outlook reflects our expectation that finances will continue to remain solid and that the fund balance will remain at strong levels," said Standard & Poor's credit analyst Hilary Sutton. "The stability of the revenue streams, bolstered by the anticipated additional property tax related revenue in 2011, adds to the stability of the credit," said Ms. Sutton.
Further adding to the stability of the outlook is the area's draw to second-home buyers, which adds value to the tax base but tends to require fewer services.
The city of Newport is the sole participant in the League of Oregon Cities Cooperative Asset Financing Program's series 2009B COPs and its payments to the league pursuant to a financing agreement secure the COPs. Payments made under the financing agreement constitute a full faith and credit obligation of the city, payable from general fund revenues and other available revenues. Securing the GO bonds is Newport's GO pledge. We understand Newport will use COP proceeds to finance infrastructure improvements and acquisitions.
The City of Newport is located in Lincoln County, Ore., on the Pacific Coast. We believe the city's overall net debt burden high at $6,600 per capita and moderate at 3.4% of market value, reflective of part of the area's second-home wealth. The city's overall debt service as a percent of total government expenditures is, in our opinion, an elevated 15.9%. The city does not have any near- to medium-term plans for additional general obligation debt.
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:
Hilary A Sutton, New York 212-438-7093
Le T Quach, San Francisco (1) 415- 371-5013
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Americas Media Relations: (1) 212-438-6667
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