Fitch assigns an 'AA' rating to Hillsborough County,
FL's approximately $41 million capital improvement program refunding
revenue bonds, series 2006. The bonds are expected to price on March
29 through competitive bid. At this time, Fitch also affirms the 'AA'
rating on the county's $83.21 million in outstanding capital
improvement refunding revenue bonds series 2003. The Rating Outlook is
Stable.
The 'AA' rating on the series 2006 bonds reflects strong debt service coverage by pledged revenues, and the county's strong general credit characteristics. The county's general obligation (GO) bonds are rated 'AA+' by Fitch. The bonds now offered will be used to currently refund senior lien capital improvement program refunding revenue bonds, series 1996, and to terminate a forward interest rate swap agreement. The net present value savings on the refunding bonds is estimated to be 4.9% of refunded par. Upon the issuance of the series 2006 bonds and the refunding of the series 1996 bonds, the closed senior lien on sales tax revenues that secured the 1996 bonds (rated 'AA+' by Fitch) will be extinguished, and the series 2006 and 2003 bonds effectively will have a parity lien on and pledge of all county revenues from the local government half-cent sales tax.
The capital improvement program refunding bonds are secured by the county's share of the local government one-half-cent sales tax imposed by the state and, if applicable, qualified derivative payments. One-half-cent sales tax proceeds are distributed to each county based on retail sales activity, and within counties according to a formula based on the relative population of the incorporated and unincorporated areas. Hillsborough County's share, 71.13% in fiscal 2004, has averaged 71.29% annually over the last four fiscal years. Growth in one-half-cent sales tax receipts has been strong, averaging 5.5% annually in each of the last four fiscal years. Collections for the first seven months of fiscal 2006, reflecting sales activity through October 2005, were up 11.6% over the prior period in fiscal 2005. Fiscal 2005 pledged revenues cover maximum annual debt service (MADS) 6.6 times (x).
The county's GO rating reflects its strong financial policies and practices, a moderate tax-supported debt burden, and growing and diversifying economy. The service and trade sectors account for the largest components of the employment base. Tampa is home to numerous regional headquarters of multinational finance and insurance companies, providing employment opportunities to residents countywide. The county's unemployment rate is below the state's and nation's and per capita retail sales exceed the state and nation by 29%. Tax base growth has been strong, averaging 11.5% annually over the past five fiscal years. Fiscal 2005 ended with an unreserved general fund balance of $121.5 million, representing an ample 15.1% of expenditures, transfers out, and other uses. Overall debt is moderate, at 3.9% of taxable assessed value (TAV). The fiscal years 2006-2011 capital plan includes $955 million in planned spending, 34% of which will be debt financed with general government and self-supporting enterprise fund revenue bonds. The remaining 66% will be funded on a pay-as-you-go basis from a variety of sources, including enterprise system fees, property taxes, and sales tax revenues.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
The 'AA' rating on the series 2006 bonds reflects strong debt service coverage by pledged revenues, and the county's strong general credit characteristics. The county's general obligation (GO) bonds are rated 'AA+' by Fitch. The bonds now offered will be used to currently refund senior lien capital improvement program refunding revenue bonds, series 1996, and to terminate a forward interest rate swap agreement. The net present value savings on the refunding bonds is estimated to be 4.9% of refunded par. Upon the issuance of the series 2006 bonds and the refunding of the series 1996 bonds, the closed senior lien on sales tax revenues that secured the 1996 bonds (rated 'AA+' by Fitch) will be extinguished, and the series 2006 and 2003 bonds effectively will have a parity lien on and pledge of all county revenues from the local government half-cent sales tax.
The capital improvement program refunding bonds are secured by the county's share of the local government one-half-cent sales tax imposed by the state and, if applicable, qualified derivative payments. One-half-cent sales tax proceeds are distributed to each county based on retail sales activity, and within counties according to a formula based on the relative population of the incorporated and unincorporated areas. Hillsborough County's share, 71.13% in fiscal 2004, has averaged 71.29% annually over the last four fiscal years. Growth in one-half-cent sales tax receipts has been strong, averaging 5.5% annually in each of the last four fiscal years. Collections for the first seven months of fiscal 2006, reflecting sales activity through October 2005, were up 11.6% over the prior period in fiscal 2005. Fiscal 2005 pledged revenues cover maximum annual debt service (MADS) 6.6 times (x).
The county's GO rating reflects its strong financial policies and practices, a moderate tax-supported debt burden, and growing and diversifying economy. The service and trade sectors account for the largest components of the employment base. Tampa is home to numerous regional headquarters of multinational finance and insurance companies, providing employment opportunities to residents countywide. The county's unemployment rate is below the state's and nation's and per capita retail sales exceed the state and nation by 29%. Tax base growth has been strong, averaging 11.5% annually over the past five fiscal years. Fiscal 2005 ended with an unreserved general fund balance of $121.5 million, representing an ample 15.1% of expenditures, transfers out, and other uses. Overall debt is moderate, at 3.9% of taxable assessed value (TAV). The fiscal years 2006-2011 capital plan includes $955 million in planned spending, 34% of which will be debt financed with general government and self-supporting enterprise fund revenue bonds. The remaining 66% will be funded on a pay-as-you-go basis from a variety of sources, including enterprise system fees, property taxes, and sales tax revenues.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.