Fitch says city debt outlook is stable

Media Relations spokesperson Cindy Stoller reported to Historic City News that in the course of routine surveillance, Fitch Ratings has affirmed the following debt ratings for St. Augustine, Florida.

–$11.3 million in public service tax revenue bonds (PST) at ‘A+’;

–$21.6 million in capital improvement bonds (non ad-valorem) at ‘A’;

–Implied general obligation (GO) at ‘A+’.

The Rating Outlook is Stable.

The ‘A+’ implied general obligation rating is based on the city’s strong financial operations characterized by consistently robust reserves, low debt levels with below average amortization, and narrow economy concentrated in tourism.

While the city does not have a formal capital improvement plan, capital needs appear to be limited and funded largely through pay-go funding.

The ratings for the public service tax revenue bonds and non ad-valorem bonds incorporate healthy debt service coverage and sound legal provisions.

Unaudited fiscal 2008 results show 2.4 times maximum annual debt service coverage for the public service tax revenue bonds and 6.2 times coverage for non ad-valorem bonds.

While revenues are expected to soften in fiscal 2009, coverage should remain healthy. Appropriation risk is also factored into the capital improvement bond rating.

Fitch’s rating definitions and the terms of use 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.

Fitch’s code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the ‘Code of Conduct’ section of this site.