SAN BERNARDINO COUNTY (CALIF.) TRANSIT AUTHORITY BONDS RATED 'A+' -- FITCH FINANCIAL WIRE --
SAN BERNARDINO COUNTY (CALIF.) TRANSIT AUTHORITY BONDS RATED 'A+'
-- FITCH FINANCIAL WIRE --
NEW YORK, Feb. 10 /PRNewswire/ -- The San Bernardino County Transportation Authority, Calif.'s $110 million Sales Tax Revenue Bonds (Unlimited Tax Bonds) 1992 Series A are rated "A+" by Fitch. The bonds will be sold through negotiation by a syndicate led by The First Boston Corp. during the week of Feb. 17. This is the first time Fitch has been asked to rate the authority's debt. The credit trend is stable.
The authority's credit strength rests in its strong projected debt service coverage, straightforward and flexible capital plan, and the county's overall economic development. While economic activity in the area has slowed as a result of the weak conditions in southern California, county retail trade continues to provide a stable tax base and sound protection for bondholders. A recent California Supreme Court decision declaring the sales tax levied by another entity unconstitutional is not expected to impact the authority or the bonds.
San Bernardino County has experienced rapid development in recent years, making it part of one of the fastest growing areas in the country. In response, the county is addressing the substantial transportation infrastructure needs its development now requires. The authority's capital plan totals $1.67 billion and involves primarily highway and street construction and improvement. The plan is funded largely from the sales tax revenue, or from the proceeds of bonds secured by the tax, with a small percentage of funds coming from the state and to-be-imposed developer fees. The building program is flexible and able to be adjusted should revenue not be realized as expected, or growth cease.
Debt service coverage is strong even when including the authority's total projected bond sales, never going below 2 times (x), based on reasonable assumptions. Extremely conservative assumptions, figuring no growth in sales tax revenue beyond this year, project debt service coverage at a minimum 1.7x.
A recent state supreme court decision invalidated a 0.5 percent sales tax levied by the San Diego Regional Criminal Justice Facility Financing Agency that was approved by voters in a manner similar to that of the tax securing these bonds. The issuer's counsel and bond counsel believe that substantial differences exist between the San Bernardino County Transportation Authority and its tax and the litigant and its tax, thereby concluding that the final outcome of the litigation should not impact the authority's ability to pay debt service.
/CONTACT: Amy S. Doppelt of Fitch, 212-908-0514/ CO: San Bernardino County Transportation County ST: California IN: TRN SU: RTG TS -- NY037 -- 8231 02/10/92 11:15 EST