Fitch U.S. Public Finance Third-Quarter Rating Actions.
The largest upgrades on a par basis were two transportation credits, Metropolitan Washington Airports Authority, DC (upgraded to 'AA' from 'AA-') and Dallas-Fort Worth, TX, airport revenue bonds (upgraded to 'AA-' from 'A+'), with par amounts of $3.93 billion and $3.6 billion, respectively. Two other large upgraded issuers were in the health care sector: Adventist Health System Sunbelt, FL, with $2.96 billion par (upgraded to 'AA-' from 'A+'), and New York City Health & Hospitals Corp general revenue bonds with $962 million of par (upgraded to 'A-' from 'BBB+').
There were 18 tax-supported credits upgraded during the quarter, with a total par value of $1.54 billion. Two issuers represented over half of the upgraded par: Orange County, FL ($446.6 million), upgraded to 'AA' from 'AA-', and San Francisco Bay Area Rapid Transit District, CA ($487.2 million), upgraded to 'AAA' from 'AA+'. Other notable tax-supported upgrades included $143 million of Coppell Independent School District's, TX general obligation (GO) bonds to 'AA' from 'AA-' as well as $138.6 million of sales tax revenue bonds issued by Leon County - City of Tallahassee, FL Blueprint 2000 Intergovernmental Agency to 'AA-' from 'A+'.
Of the 14 downgrades, there were five tax-supported (Fort Worth, TX tax & revenue and lease bonds; Pilot Point Independent School District, TX; Pontiac General Building Authority, MI; and Red Mesa Unified School District No. 27, AZ), two health care (Harrogate, Inc., NJ; Windham Hospital, CT), two water & sewer (Fort Worth, TX; and Pontiac, MI), and one transportation credit (Las Vegas Monorail Company, NV). Additionally, four of the total downgrades were Native American Gaming credits affected by the rating criteria changes as described in the Fitch report 'Native American Gaming: Rating Methodology', dated Sept. 4, 2007 and available on the Fitch web site at www.fitchratings.com. The affected credits were Cow Creek Band of Umpqua Indians, OR; Laguna Development Corp, NM; Pueblo of Santa Ana, NM; and San Manuel Entertainment Authority, CA.
As of Sept. 30, 26 credits were on Rating Watch Negative and two were on Rating Watch Positive compared to 21 on Watch Negative and two on Watch Positive at the end of the second quarter. The median number of credits on Watch Negative since Fitch began producing quarterly actions is 23. During the third quarter, seven credits were removed from Watch Negative. Of the seven, six were removed in conjunction with downgrades and one in conjunction with an upgrade. The downgraded credits were Laguna Development Corporation's gaming revenue bonds ('BB'); Pontiac General Building Authority's GOs ('B+'); Pontiac's sewer revenue bonds ('BB-'); Pontiac water revenue bonds ('BB-'); Pueblo of Santa Ana's enterprise special obligation bonds ('BB+'); and San Manuel Entertainment Authority's general revenue bonds ('BBB'). The upgraded credit was Lodi Electric Utility's electric system certificates of participation ('BBB'). Additionally, three credits were placed on Watch Negative during the third quarter: Friendship Village of Schaumburg's general revenue bonds ('BB+'); Jordan School District's GOs ('AAA'), and Monroe County's GOs ('BBB+').
As of Sept. 30, 2007, there were 103 U.S. public finance credits with a Positive Rating Outlook and 82 with a Negative Rating Outlook. This translated to a ratio of 1.26:1, the highest ratio of credits with a Positive-to-Negative Outlook since Fitch started publishing the ratio in 2002. The last three quarters have all had Positive-to-Negative Outlook ratios greater than 1:1. Of the 103 credits with a Positive Rating Outlook, 47 were in the tax-backed sector.