Correction: Fitch Rts $285MM Kern County, CA Pension Obligation Bonds, Ser 2003, 'A'.Business Editors (In a press release issued yesterday the rating for the pension obligation refunding bonds, series 2002 was incorrect. The correct rating for the bonds is 'A'. The amended release follows.) SAN FRANCISCO--(BUSINESS WIRE)--April 23, 2003 Fitch Ratings--Kern County, CA's, $285,000,000 pension obligation refunding bonds, series 2002 are rated 'A' by Fitch. The bonds will be sold via negotiation with UBS UBS Union Bank of Switzerland UBS United Bible Societies UBS United Blood Services UBS United Buying Service UBS Used Bookstore UBS University Business Services UBS Universal Building Society (UK) UBS Ulaanbaatar Broadcasting System Paine Webber Paine Webber and Company was an American stock brokerage firm that was acquired by the Swiss bank UBS AG in 2000. The company was founded in 1880 in Boston, Massachusetts, by William Alfred Paine and Wallace G. Webber. as the underwriter. The rating reflects the sound financial operations within the county, moderate debt levels, and diversifying economy. The rating also reflects the strong legal structure, with debt service payments absolute and unconditional. The county maintains operating surpluses and solid reserves. Debt levels are low to moderate, with limited debt issuance anticipated in the future. The county's tax base is heavily resource based, causing some economic volatility. However, the economy has exhibited greater diversity and growth even during current economic stress, owing largely to a well developed transportation system, drawing commercial and residential development. County wealth levels are well below average. Bond proceeds will bring the system to 100% funding. This transaction yields savings to the county because the bond interest rate will be lower than the assumed 8% pension fund investment return, the rate the county currently pays on the UAAL UAAL Unfunded Actuarial Accrued Liability UAAL University Admissions Advice Letter (Western Australia) . The approximate savings are $7 million per year over the life of the bonds or $119 million dollars in net present value. Kern County's economy is focused in oil and gas as well as agriculture, although growth in other sectors is adding diversity. Warehousing, transportation, and power generation are the primary economic growth areas. Assessed value has risen 3.7% on average for the last five years with some volatility due to ongoing appeals; non-oil and gas assessed value has maintained steady growth over the past ten years. The county's unemployment rate is above that of the state and nation, at 11.8% for 2002, however, that rate has decreased significantly since 1994 and is lower than that of surrounding natural resource dominated counties. Residential and commercial building has increased at a steady rate, lured by the low cost of living and employment opportunities. County income averages are low at about 72% of the California average and 81% of the U.S., reflecting the low cost of living. County financial operations are sound, marked by operating surpluses over the last four years and healthy fund balances levels. The county has benefited from economic development as well as prudent financial policies and tenured ten·ured adj. Having tenure: tenured civil servants; tenured faculty. Adj. 1. tenured management. Revenue growth includes the aforementioned assessed value gains as well as solid increases in fines and forfeiture The involuntary relinquishment of money or property without compensation as a consequence of a breach or nonperformance of some legal obligation or the commission of a crime. The loss of a corporate charter or franchise as a result of illegality, malfeasance, or Nonfeasance. collections. However, assessed values have exhibited significant volatility over the past five years due to appeals by various oil and gas tax payers. The 2003 budget outlook remains positive with breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations operations due in part to revenue gained from two favorable assessed valuation settlements with Occidental oc·ci·den·tal or Oc·ci·den·tal adj. Of or relating to the countries of the Occident or their peoples or cultures; western. n. A native or inhabitant of an Occidental country; a westerner. Noun 1. and Wyatt. Budget preparation for fiscal 2004 is challenged by the state's sizable fiscal imbalance Fiscal imbalance is the term used by governments to describe a monetary imbalance between the national government and smaller, subordinate governments, such as those of states or provinces. . The county is an infrequent debt issuer, last selling certificates of participation in 1999. Direct debt levels remain low to moderate and total $1,026 per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals. and 1.7% of taxable market value; overlapping debt Overlapping Debt The debt of a political entity such as a state where its tax base overlaps the tax base of another political entity such as a city within the state. Notes: If the issuer of a municipal bond has overlapping debt, it should be considered. is moderate at $2,242 and 3.7% of taxable market value. Amortization is slow, reflecting ascending debt service. Debt ratios are expected to remain affordable since no future issuance is expected for the next few years. The bonds are secured by an absolute and unconditional pledge of the county. |
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