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SAN ANTONIO, TX HOTEL REVENUE BONDS, SERIES 1996 RATED 'A' BY FITCH -- FITCH FINANCIAL WIRE --

NEW YORK, March 8 /PRNewswire/ -- The city of San Antonio, TX's approximately $178,000,000 Hotel Occupancy Tax Revenue Bonds (Henry B. Gonzalez Convention Center Expansion Project) Series 1996 are rated 'A' by Fitch. The bonds are expected to sell the week of March 11 by a syndicate led by Smith Barney and are expected to be insured by Financial Guaranty Insurance Co., whose claims paying ability Fitch rates 'AAA'. The bonds are currently structured as current application serial bonds maturing Aug. 15, 2000-2010, current interest bonds maturing Aug. 15, 2011-2020, and one or more term bonds with a final maturity of Aug. 15, 2026.

Optional redemption features are to be determined. The credit trend is stable.

The 'A' rating reflects the adequate coverage provided by pledged revenues, satisfactory security features, and the strength of the underlying tourist economy. Bond proceeds will finance the costs of the expansion and renovation of the Henry B. Gonzalez Convention Center. The series bonds are secured by the 2% expansion Hotel Occupancy Tax levied solely for this project, 5.25% (of a total of 7%) general Hotel Occupancy Tax and interest earnings on bond funds. Although hotel occupancy receipts are inherently volatile, actual receipts for the past five years demonstrate stability, reflective of the city's popularity as a tourist and convention destination. The series 1996 bonds have been structured so that the pledged expansion hotel occupancy tax (HOT) will be sufficient to pay to cover debt service assuming a 5% annual increase in expansion tax receipts.

The bonds are also secured by 5.25% pledge of the 7% general hotel occupancy tax. The 1.65 times (x) average coverage of proposed debt service by 1995 pledged revenues is adequate and provides margin for a significant decline in revenues. The city has a significant amount of new hotel rooms constructed in the last year and currently being built, which increase potential revenues.

San Antonio is a favored Southwestern destination for conventions and tourism, its second largest industry. National and international conventions hosted by the city have grown by nearly 80.2% since 1987, generating an estimated $419 million in 1995. The city's current hotel room supply exceeds 23,500. San Antonio's overall economy exhibited steady growth during the 1980s and early 1990s, continuing its evolution into a major urban center. Between September 1992 and September 1995, MSA non-agricultural employment sector distribution saw growth in every major category, especially in the construction sector, which grew by 33% during this period. Single/multifamily construction permits have increased by a very impressive 96.5% since 1992, totaling an estimated $301.2 million in new construction for 1995.
 -0- 3/8/96


/CONTACT: Steve Eaddy, 212-908-0664, or John H. Klinges, 212-908-0611, both of Fitch/

CO: ST: Texas IN: LEI SU: RTG

TM -- NYF065 -- 1804 03/08/96 20:05 EST
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Publication:PR Newswire
Date:Mar 8, 1996
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