NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the following Hillsborough County, Florida's (the county) Tampa Sports Authority (TSA) bonds at 'AA+':
--$20.2 million Florida sales tax revenue refunding (sales tax payment) revenue bonds (stadium project).
The Rating Outlook is revised to Stable from Negative.
SECURITY
The bonds are secured by an annual $2 million distribution of sales taxes which are allocated from the state's 6% sales tax. The annual payments are equal to the debt service requirements. Pursuant to an interlocal agreement, the county is obligated to pay immediately all sales tax revenues received by the county to the trustee on behalf of the TSA for the benefit of bondholders.
KEY RATING DRIVERS
OUTLOOK REVISION/RATING CAP: The revision in Outlook on the bonds from Negative reflects Fitch's recent revision of the Outlook on the state of Florida's 'AAA' rating to Stable from Negative. The rating is capped by the lower of the county general obligation (GO) rating or one notch below the state GO rating. The county is rated 'AAA' with a Stable Outlook.
STATE OUTLOOK REVISED TO STABLE: The revision of the state Rating Outlook from Negative to Stable reflects the state's improved financial flexibility, including satisfactory reserve levels and enhanced economic performance.
REMOTE RISK FOR PAYMENT ALTERATIONS: The rating incorporates the risk, albeit remote, that the state could alter the statute that provides for the allocation of this payment to the county.
COUNTY CREDIT CHARACTERISTICS: Credit characteristics of the county include a strong financial profile, as evidenced by sound reserves, a diverse and rapidly growing economy and manageable debt and retirement liabilities.
STATE CREDIT CHARACTERISTICS: Credit characteristics of the state include sound financial management practices, solid long-term economic prospects, moderate debt burden, and well-funded pensions, balanced against revenue volatility.
RATING SENSITIVITIES
NEGATIVE RATING ACTION ON THE STATE OR COUNTY: A downgrade of the state or county's rating or diminution of the statutory payment would result in negative rating action on this security.
CREDIT PROFILE
The TSA was created for the purposes of planning, constructing and maintaining sports and recreational facilities within the county. The board is composed of 11 voting members, with five each appointed by the county and the city of Tampa (implied GO bonds rated 'AA', Stable Outlook) and one appointed by the governor.
CITY AND COUNTY RESPONSIBLE FOR OPERATING GAPS
The county and the city are obligated to cover TSA's operations and maintenance shortfalls with one third paid by the city and two thirds contributed by the county. In fiscal 2013, the operating shortfall is anticipated to be about $1.5 million, with the city contributing about $500,000 and the county subsidizing about $1 million of the shortfall. A similar gap is projected for fiscal 2014. The TSA issued bonds in 1997, subsequently refunded in 2005, to finance construction of Raymond James Stadium. The TSA has operated the county-owned stadium since 1998.
FIXED REVENUE, SLIM COVERAGE
Coverage of maximum annual debt service (MADS) by the $2 million distribution of state sales tax revenue is only slightly greater than 1.0x, as is typical of debt secured by fixed sales-tax distributions. Fitch believes the slim current coverage will prevent any further leveraging of the security. The debt service reserve account is cash funded at 50% of MADS.
For more information on the state, please see Fitch's latest release dated Aug. 23, 2013. For more information on the county, please see Fitch's latest release dated Sept. 24, 2012. Both are available on Fitch's website at 'www.fitchratings.com'.
Additional information is available at 'www.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, University Financial Associates, S&P/Case-Shiller Home Price Index, IHS Global Insight, National Association of Realtors.
Applicable Criteria and Related Research:
--'Tax-Supported Rating Criteria' (Aug. 14, 2012);
--'U.S. Local Government Tax-Supported Rating Criteria' (Aug. 14, 2012).
Applicable Criteria and Related Research:
Tax-Supported Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686015
U.S. Local Government Tax-Supported Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=685314
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=800549
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