Printer Friendly

HOUSTON, TEXAS, $2.7 MILLION VARIABLE RATE GENERAL OBLIGATION BONDS RATED 'AA/F-1+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, May 27 /PRNewswire/ -- Houston, TX's $2.7 million Variable Rate Demand General Obligation Bonds Series 1993E are rated 'AA/F-1+' by Fitch. The bonds will be sold through negotiation on or about June 1 by J.P. Morgan Securities Inc. The credit trend is declining. The 'AA' rating on $1.26 billion in parity debt is affirmed.
 Houston's economy was stagnant during the latter stages of the national recession, worsening a revenue/expenditure imbalance that existed since the city began drawing down a once-large fund balance in fiscal 1990. Measures taken to close a sizable budget gap this fiscal year have been successful, with operations estimated to about break even. The ending general fund balance is expected to be about 3 percent of expenditures, an adequate level but below the city's 5 percent goal established in a city ordinance. The mayor has stated his intent to rebuild the balance to about 4 percent over the next few years. The proposed financial plan for fiscal 1994 is balanced using a small surplus generated this year, greater property tax collections, and certain fee increases. Financial projections through fiscal 1998 indicate surpluses in the later years, but are based on assumptions that may be difficult to achieve, such as steady, moderate economic growth, no pay increases for employees until fiscal 1996, and improvement in the city's health benefits fund without greater general revenue assistance. The declining trend reflects these ongoing financial pressures, which include increased debt service expense, in part a result of recent debt restructurings.
 The Houston area's employment base exhibited no growth during 1992, while the labor force gained, resulting in a 7.2 percent unemployment rate for the year. By sector, the results were mixed, with job growth in services and trade offset by declines in other areas, primarily construction and manufacturing. Monthly data for 1993 show very small job gains, although the unemployment rate rose to 8.3 percent in February. The real estate market is improving from the severe overcapacity of the mid-to-late 1980s, with building permit activity at a six-year high, office vacancy rates declining, and the average rental price increasing slightly.
 Houston's debt burden remains moderate. Recent debt restructurings slowed amortization to an average rate but did not extend the final maturity. For this issue, strong liquidity for bondholder puts is provided by a standby bond purchase agreement with Canadian Imperial Bank of Commerce (New York Agency).
 -0- 5/27/93
 /CONTACT: Amy S. Doppelt, 212-908-0514, or Richard J. Raphael, 212-908-0506, or Stewart Simon, 212-908-0508, all of Fitch/


CO: ST: New York IN: SU: RTG

LD -- NY104 -- 3200 05/27/93 18:21 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:May 27, 1993
Words:440
Previous Article:RESIDENTIAL FUNDING $87.8 MILLION MORTGAGE CERTIFICATES 1993-S19 RATED 'AAA' BY FITCH -- FITCH FINANCIAL WIRE --
Next Article:UNITED MINE WORKERS WIN WEST VIRGINIA ORGANIZING DRIVE


Related Articles
HOUSTON VARIABLE RATE DEMAND DEBT RATED 'AA/F1+' BY FITCH -- FITCH FINANCIAL WIRE --
HOUSTON PUBLIC IMPROVEMENT REFUNDING BONDS RATED 'AA' BY FITCH -- FITCH FINANCIAL WIRE --
SAN ANTONIO (TEXAS) GENERAL OBLIGATION DEBT RATED 'AA' BY FITCH -- FITCH FINANCIAL WIRE --
FLORIDA'S $250 MILLION GENERAL OBLIGATION BONDS RATED 'AA' BY FITCH -- FITCH FINANCIAL WIRE --
SAN ANTONIO, TEXAS' REFUNDED BONDS RATED 'AAA' BY FITCH -- FITCH FINANCIAL WIRE --
HOUSTON SHIP CHANNEL BRIDGE SENIOR BOND RATING WITHDRAWN BY FITCH -- FITCH FINANCIAL WIRE --
HOUSTON (TX) VARIABLE RATE DEMAND GO BONDS RATED 'AA/F-1+' BY FITCH -- FITCH FINANCIAL WIRE (FFW)--
CALIFORNIA'S $400 MILLION G.O. BONDS RATED 'AA' BY FITCH -- FITCH FINANCIAL WIRE --
HOUSTON (TEXAS) TAX DEBT RATED 'AA/F-1+' BY FITCH -- FITCH FINANCIAL WIRE --
HOUSTON (TEXAS) REFUNDING BONDS 'AA', MUNICIPAL UTILITY DISTRICT REFUNDING BONDS 'AA (CONDITIONAL)' BY FITCH -- FITCH FINANCIAL WIRE --

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters