Fitch Affirms Sand Creek Metro District, Colorado's LTGOs at 'BBB'; Outlook Positive

NEW YORK--(BUSINESS WIRE)--In the course of routine surveillance, Fitch Ratings has affirmed the 'BBB' rating on Sand Creek Metro District, Colorado's (the district) $24 million in outstanding limited tax general obligation (LTGOs) bonds. The Rating Outlook is Positive.

The 'BBB' rating reflects the district's continued development and tax base gains along with high tax base concentration and debt levels. The district benefits from a favorable location for growth, along I-70 near Denver International Airport in the City of Aurora and the City and County of Denver. The district has experienced strong commercial and industrial development in recent years. The tax base remains concentrated, with the top 12 taxpayers comprising 56% of the district's assessed valuation.

Assessed value has risen 13.6% per year on average from 2002-2009 (estimated), with double-digit annual gains in five of these seven years. While the district does have taxing flexibility, it intends to keep rates low and in line with its manageable expenses.

The Positive Outlook is tied to the district's advancing stage in development and minimal capital needs. The district's low tax rate and high reserve levels provide it with ample financial flexibility going forward. Also, as the tax base strengthens, the district becomes decreasingly reliant on reimbursements from cost sharing agreements. The district is nearly 60% developed and the office vacancy rate, currently 9.8%, is low relative to the surrounding areas. Fitch will monitor the progress and completion of several promising new developments in the district's pipeline.

The district's direct debt levels are currently high relative to other tax-supported issuers, but within range for these types of entities. Direct debt equals 8.6% of taxable market value. Amortization is below average with approximately 35% of debt being retired in 10 years. Future debt needs are minimal.

Sand Creek Metro District is a limited purpose government encompassing 1,253 acres in the northeast Denver metropolitan area, approximately 12 miles east of downtown Denver and 10 miles southwest of Denver International Airport (DIA). The district provides financing for the construction and installation of streets, drainage structures, street safety controls, parks, water and sewer improvements and other infrastructure systems needed to encourage and support the existing and future development.

Additional information is available at 'www.fitchratings.com'.

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