Fitch Ratings has removed from Rating Watch Negative the following tax allocation bonds (TABs) for the Santa Ana Community Redevelopment Agency, CA (the CRA):
--$66.8 million refunding TABs, series 2011A, 'A+';
The Rating Outlook is Stable.
SECURITY
The bonds are secured by a senior lien on gross tax increment, net of housing set-asides and pass-throughs to various entities. Also, debt service on certain 2003 TABs is senior to these bonds as it applies to tax increment from the South Main Street sub-project only.
KEY RATING DRIVERS
PROGRESS ON AB 1X26 IMPLEMENTATION: The City of Santa Ana (the city) has been recognized as the successor agency (SA) to the CRA. The recognized obligation payment schedules (ROPs), which include calendar 2012 debt service, have been approved by the oversight board and state. The SA has received sufficient payments, along with available cash reserves, to cover the debt service included in the ROPs.
IMPLICATIONS OF AB 1484: The governor signed this trailer bill to the state's fiscal 2013 budget on June 27, 2012. The bill includes what Fitch believes are improvements to the ROPs approval process and other procedures going forward. However, it required repayment by many SAs of property tax distributions from December 2011 and January 2012 that the state believes should have been directed to other taxing entities. The SA represents that it did not owe a repayment to the county auditor-controller.
HOUSING REVENUE AVAILABILITY: The lack of distinction between former housing set-aside revenue and total tax increment under AB 1X26 did not affect Fitch's assessment of credit quality.
Additional information on the CRA is available in Fitch's Dec. 3, 2011 release, available at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
In addition to the sources of information identified in Fitch's Tax-Supported Rating Criteria, this action was additionally informed by information from Creditscope, University Financial Associates, S&P/Case-Shiller Home Price Index, IHS Global Insight, and National Association of Realtors.
Applicable Criteria and Related Research:
--'Tax-Supported Rating Criteria' (Aug. 15, 2011);
--'U.S. Local Government Tax-Supported Rating Criteria' (Aug. 15, 2011).
Applicable Criteria and Related Research:
Tax-Supported Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648898
U.S. Local Government Tax-Supported Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648842
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Fitch Ratings
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+1-212-908 0526
elizabeth.fogerty@fitchratings.com
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Primary
Analyst:
Larry Levitz, Director, +1-212-908-9174
Fitch Inc.,
One State Street Plaza, New York, NY 10004
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Secondary
Analyst:
Scott Monroe, +1-415-732-5618
or
Committee
Chairperson:
Karen Ribble, Senior Director, +1-415-732-5611