Fitch Rates Victoria, Texas Sales Tax Bonds 'AA-'.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. assigns a rating of 'AA-' to the Victoria Sales Tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. Development Corporation's $8.4 million sales tax revenue bonds, series 2007. The bonds are scheduled to sell through negotiation with a syndicate led by Southwest Securities on Dec. 14, 2006. The Rating Outlook is Stable. The bonds are special obligations of the corporation payable from a first lien on and pledge of a dedicated one-half of one percent sales tax collected within the boundaries of the city of Victoria, Texas for the benefit of the corporation. Proceeds from the sale of the bonds will fund a sports venue project, primarily baseball fields and softball fields for amateur sports. The issuance of sales tax bonds for this purpose was approved by voters in May 2006. This is the first issuance of bonds by the corporation, which was created in 1996. The 'AA-' rating is based on the strong performance of the sales tax in recent years, solid debt service coverage, and barriers to future leveraging of pledged revenues, as well as the city's stable economy and position as a regional center for trade. The rating also considers the economic sensitivity of pledged sales tax revenues and some economic concentration in the plastics and petrochemical industries. The corporation is a 4B nonprofit corporation nonprofit corporation n. an organization incorporated under state laws and approved by both the state's Secretary of State and its taxing authority as operating for educational, charitable, social, religious, civic or humanitarian purposes. created following the passage of a one-half of one percent sales tax to promote and provide for economic development within the city, mainly through the funding of infrastructure projects. The city council appoints the corporation's board of directors. Corporation sales tax receipt growth has been robust in recent years, following declines in fiscals 2002 and 2003. Fiscal 2006 receipts rose 11.6% above fiscal 2005 results following gains of 7.6% in fiscal 2005 and 9.8% in 2004. Fiscal 2006 revenues provide strong 5.5 times (x) coverage of maximum annual debt service. Amortization is rapid, with all debt retired by 2017. The reserve requirement of average annual debt service will be met with a surety policy obtained at closing. The additional bonds test Additional bonds test A test for ensuring that bond issuers can meet the debt service requirements of issuing any new additional bonds. additional bonds test requires 1.4x coverage of average annual debt service. A key credit factor in assigning the high grade rating is the further limit on future leverage due to the attorney general's opinion that all corporation bond issues must be approved by voters and the fact that only sports-related bonding proposals can seek voter approval pursuant to the 4B corporation act. The corporation has no current plans to issue additional debt, although excess sales tax revenues will continue to be used for projects. Victoria, with an estimated 2006 population of roughly 61,500, is located between Houston and Corpus Christi, 30 miles inland from the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east . A barge canal connects the city to the Gulf Intracoastal Waterway Gulf Intracoastal Waterway System of inland waterways, including rivers and canals, along the U.S. coast of the Gulf of Mexico. It extends from Apalachee Bay, Fla., west to the Mexican border at Brownsville, Texas, a distance of more than 1,100 mi (1,770 km). , allowing access to ports on the Gulf and Atlantic coasts, as well as destinations on the Mississippi River. The city has emerged as a regional service and supply center for heavy industry, including petrochemical and plastics manufacturing. The development of the service and retail sectors has complemented the industrial base and added a measure of diversity and stability to the local economy. As a retail trade center, 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. retail sales in the city of Victoria are substantially higher than state and national levels. The labor force of the city has remained fairly constant over the past five years and local unemployment rates generally have been lower than both state and national averages over the past several years. The city's financial profile is solid, as evidenced by operating surpluses, healthy reserves, and conservative budgeting practices. Sales taxes provide roughly one-third of operating revenues. The series 2007 bonds will mature June 15, 2008-2017 and are not callable Callable Applies mainly to convertible securities. Redeemable by the issuer before the scheduled maturity under specific conditions and at a stated price, which usually begins at a premium to par and declines annually. . Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. 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