Bangkok--12 Feb--Standard & Poor's
Standard & Poor's Ratings Services raised its underlying rating (SPUR) on Greater Arizona Development Authority's series 2006-1 infrastructure revenue bonds one notch to 'AA-' from 'A+', issued on behalf of Pinal County, based on good coverage and a broad population and economic base. The outlook is stable.
Pursuant to a loan agreement between the authority and county, loan payments made by the county secure the debt service payments.
The 'AA-' rating reflects the credit quality of Pinal County's ability to make these loan payments.
Credit factors include the county's economic base with convenient access to Phoenix and Tucson, Ariz. employment centers, strong coverage from pledged revenues, and sound legal provisions.
The state's declining sales tax revenues offset these credit strengths.
"It is our opinion that coverage is strong at current levels and that coverage should remain at least adequate while the state experiences declining sales tax revenues," said Standard & Poor's credit analyst Lisa Schroeer.
Encompassing 5,386 square miles, the county's population grew by an average of about 9% annually to 309,500 in 2008.
Maximum annual debt service coverage from pledged revenues based on fiscal 2009 numbers provided by management is a good 3.9x. Management reports revenues were $20 million for fiscal 2009, down from $25 million in fiscal 2007. Revenues should continue to decline in fiscal 2010. Current projections from management estimate about $18 million. Coverage will still be above 3x at this level, but the trend of this revenue stream is uncertain. State sales tax revenues fell by 13.7% in fiscal 2009; this marked the second consecutive year of annual sales tax declines. As of October 2009, year-to-date sales tax collections were down by 17.2% compared with fiscal 2009 levels.
The rating action affects roughly $60 million of debt outstanding.
RELATED RESEARCH
USPF Criteria: Special Tax Bonds, June 13, 2007
Complete ratings information is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
Lisa Schroeer, Charlottesville (1) 434-220-0892
Timothy Barrett, New York (1) 212-438-6327
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_
[email protected]
Americas Customer Service: (1) 212-438-7280
[email protected]