Fitch Ratings has affirmed the following ratings on the --
The Rating Outlook is Stable.
The senior lien bonds are secured by a first lien on pledged revenues, which consist of a countywide car rental and hotel occupancy tax and facility-related taxes and revenues. The subordinate lien bonds are secured by a subordinate lien on pledged revenues after payment of statutory tourism promotion contributions, indexed 5 percent per year from a
KEY RATING DRIVERS
NARROW PLEDGED REVENUES: The primary revenue sources are susceptible to fluctuations in economic conditions. The balance of pledged revenue is even narrower, relying on activity at the stadium.
ADEQUATE DEBT SERVICE COVERAGE: Coverage of the authority's stadium bonds remains adequate for the respective rating levels, despite the economic and revenue challenges of the recent past. Bond indenture provisions include a below-average additional bonds test, although the authority does not anticipate new debt issuance at this time.
POSITIVE ECONOMIC PROSPECTS: The authority participates in the broad and diverse greater
REAUTHORIZATION OF TOURISM TAXES: The availability of tourism- related revenues, which account for more than 60 percent of pledged revenue, terminates several years prior to final maturity on the bonds. The sufficiency of facility-related revenue, combined with the potential to pay debt and reauthorization of the tourism taxes somewhat tempers this risk.
COVERAGE ADEQUACY: The rating is sensitive to downward shifts as well as potential improvement in the authority's debt service coverage.
The authority is located in
The stadium is home to the
TOURISM REVENUES REGISTER SOLID GROWTH
Countywide tourism tax revenues contribute about 60 percent of fiscal 2013 pledged revenues and include a car rental surcharge equal to the greater of 3.25 percent of the gross proceeds or gross income from the business or
The authority has an intergovernmental agreement in place with the
Fiscal 2013 tourism tax revenues of
Management projects fiscal 2014 tourism tax revenues moderately above fiscal 2013 normalized values based on year-to-date performance. This trend is consistent with regional economic improvements. Nevertheless Fitch expects tourism tax revenues to remain volatile and sensitive to changes in economic conditions over the long-term horizon.
FACILITY REVENUES COVER OUTER-YEAR DEBT 3x
The other major revenue source - facility revenue - is comprised of certain state income taxes from
Annual debt service drops from
SATISFACTORY DEBT SERVICE COVERAGE
Senior lien bond debt service coverage for fiscal 2014, using fiscal 2013 pledged revenues, is sound at 3.3x and subordinate lien bond coverage is satisfactory at 1.75x. Using normalized fiscal 2013 pledged revenues, coverage remains sound at 3.1x for senior and 1.65x for subordinate obligations. Fiscal 2013 revenues cover MADS in fiscal 2031 at 1.78x-1.68x using normalized revenues. A stress case which reduces current revenue by 15 percent still yields MADs coverage of 1.5x-1.43x times using normalized revenues.
The subordinate lien bonds are secured by the same pledged revenues after payment of the senior bonds and required tourism promotion contributions. Fitch takes some comfort from the authority's flexibility regarding annual distributions for other programs, including tourism-related functions (the payment for which occurs prior to subordinate lien debt service in the flow of funds).
The authority's enabling legislation requires pledged revenue distributions (after all debt service) for
Management has responded to revenue pressures of the recent past with various spending reductions, the extension of the current facility management company and the current concessions provider through the end of fiscal year 2015 (and after the Super Bowl is held at the stadium). Management conservatively projects break-even or positive operating results within several years as the economy continues to improve. Officials report no problems with minor capital or maintenance needs, which Fitch considers reasonable given the low age of the facility.
BELOW-AVERAGE ADDITIONAL BONDS TEST/NO NEW DEBT PLANNED
The indenture includes a weak additional bond coverage test of 1.3x for senior and 1.15x for subordinate bonds. However, the authority does not plan to issue additional debt in the foreseeable future. Management reports that modest capital needs at the facility will be funded with cash. The authority plans to contribute to area spring training baseball capital projects on a pay-as-you-go basis. The authority also plans to meet its contributions to area spring training baseball capital projects by making annual payments pursuant to the IGAs with local cities.
A recovering local economy is evidenced by the improved tourism tax revenues which Fitch notes is consistent with regional sales tax trends. Economic data also indicate an increase in housing starts and improving home prices, albeit at levels significantly below recent peaks.
The county unemployment rate of 6.6 percent as of
Additional information is available at 'fitchratings.com'.
In addition to the sources of information identified in Fitch's Tax-Supported Rating Criteria, this action was additionally informed by information from Creditscope,
--'Tax-Supported Rating Criteria' (
--'U.S. Local Government Tax-Supported Rating Criteria' (
Tax-Supported Rating Criteria
U.S. Local Government Tax-Supported Rating Criteria
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Fitch Ratings has affirmed the following ratings on the