Bangkok--5 Nov--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'AA-' rating to Las Vegas, Nev.'s $14.6 million series 2009A tax-exempt certificates of participation (COPs), $169.4 million series 2009B taxable COPs (direct-pay Build America Bonds), and $4.6 million series 2009C taxable COPs, all issued for the city's City Hall Project. At the same time, Standard & Poor's affirmed its 'AA' rating and underlying rating (SPUR) on the city's outstanding general obligation (GO) debt. The outlook is stable.
"The rating on the COPs reflects annual appropriation risk and the city's covenant to budget and appropriate lease payments throughout the term of the lease purchase agreement," said Standard & Poor's credit analyst Paul Dyson. "The general credit characteristics of the City of Las Vegas are also a factor, which include strong reserve levels; a newly created special reserve fund that will help the city weather current economic downturn and related revenue softness; and its strong long-term fundamentals such as a diverse tax base, a diversifying employment base; its continued popularity as a tourist destination, and relatively more affordable real estate prices due to the real estate pullback."
The COPs are being issued to finance the acquisition, construction, and equipping of a new city hall for the city, and to fund a reserve fund and capitalized interest.
The city will enter into a development agreement with QH Las Vegas LLC, and the project will be built on land in the city that, at the time of the sale of the COPs, will be owned by PQ Las Vegas LLC, an affiliate of QH Las Vegas LLC. The site is being leased by PQ Las Vegas to QH Las Vegas LLC and in turn sub-leased to the city; the city is in turn sub-leasing the site back to QH Las Vegas LLC, pursuant to a sub-ground lease, until the project is complete. QH Las Vegas LLC will sub-lease the city hall site to the city for 75 years through a sub-ground lease and the city, as lessee, will enter into a lease purchase agreement with QH Las Vegas LLC, as lessor, for the development, acquisition, and occupancy of the city hall. All rights in the lease-purchase agreement will be assigned to the trustee.
RELATED RESEARCH
USPF Criteria: "GO Debt," Oct. 12, 2006
USPF Criteria: "Appropriation-Backed Obligations," June 13, 2007
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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
Ian Carroll, San Francisco (1) 415-371-5060