Fitch Affirms Florida Seaport Revs at 'AA'; Outlook Stable

NEW YORK--()--Fitch Ratings has affirmed the 'AA' rating on the following Florida Department of Transportation bonds issued by the State of Florida:

--$129.8 million Seaport Investment Program revenue bonds, series 2013.

The Rating Outlook is Stable.

SECURITY

First lien on the annual allocation to the Seaport Investment program, which consists of the first $10 million of certain MV title fees annually appropriated and deposited into the State Transportation Trust Fund (STTF).

KEY RATING DRIVERS

FIXED APPROPRIATION FOR DEBT SERVICE: The bonds are secured by a statutorily dedicated, annually appropriated fixed dollar payment from certain motor vehicle title tax revenue deposited into the STTF.

AMPLE DEBT SERVICE COVERAGE: Debt service is limited to the current maximum appropriation of $10 million, which is amply covered by the $200 million of title fees transferred into the TTF.

LIMITS ON ADDITIONAL BORROWING: A satisfactory additional bonds test would require 1.5x coverage from certain historical motor vehicle title fees. A change in statute would be required to increase appropriation for additional debt in excess of the $10 million current allocation for annual debt service.

RATING SENSITIVITIES

The rating is sensitive to performance of the pledged revenues.

CREDIT PROFILE

The rating reflects the strength of the pledged primary revenue stream -- a fixed allocation of certain motor vehicle title fee revenues that are transferred by annual legislative appropriation to the state transportation trust fund. The state will annually appropriate to the Seaport Investment Program the first $10 million derived from the $47 portion of title fees on motor vehicles that are deposited into the STTF.

The Florida Department of Highway Safety and Motor Vehicles (DMV) collects title fees upon the issuance of each original or duplicate certificate of title on all motor vehicles operated on the roads of the state. The current fee is $70 for each certificate of title, of which $47 is deposited in the STTF up to a maximum of $200 million in any fiscal year.

AMPLE COVERAGE

Pledged revenues provide ample coverage of the $8.6 million in annual debt service that was structured within the $10 million annual allocation. The $47 portion of the transaction fee generated $227 million in fiscal 2015, of which the maximum $200 million was transferred to the TTF. MV Title transactions have rebounded from the lows reached during the recession, growing 6.1% in fiscal 2015.

SOLID LEGAL PROVISIONS

The state does not anticipate issuing additional bonds against the revenue stream. In addition, there is an additional bonds test (ABT) that requires the $47 portion of title fees in the prior year provide 1.5x coverage of maximum annual debt service (MADS).

The bonds were issued by the Florida Department of Transportation (FDOT) to finance improvements at several ports located throughout the state.

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

Fitch recently published an exposure draft of state and local government tax-supported criteria (Exposure Draft: U.S. Tax-Supported Rating Criteria, dated Sept. 10, 2015). The draft includes a number of proposed revisions to existing criteria. If applied in the proposed form, Fitch estimates the revised criteria would result in changes to fewer than 10% of existing tax-supported ratings. Fitch expects that final criteria will be approved and published by Jan. 20, 2016. Once approved, the criteria will be applied immediately to any new issue and surveillance rating review. Fitch anticipates the criteria to be applied to all ratings that fall under the criteria within a 12-month period from the final approval date.

Applicable Criteria

Exposure Draft: U.S. Tax-Supported Rating Criteria (pub. 10 Sep 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=869942

Tax-Supported Rating Criteria (pub. 14 Aug 2012)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686015

U.S. State Government Tax-Supported Rating Criteria (pub. 14 Aug 2012)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686033

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=993761

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=993761

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst
Karen Krop
Senior Director
+1-212-908-0661
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Laura Porter
Managing Director
+1-212-908-0575
or
Committee Chairperson
Marcy Block
Senior Director
+1-212-908-0239
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Karen Krop
Senior Director
+1-212-908-0661
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Laura Porter
Managing Director
+1-212-908-0575
or
Committee Chairperson
Marcy Block
Senior Director
+1-212-908-0239
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com