HomeMy WebLinkAbout1995-04-11; City Council; 13105; Credit rating upgrade6 z 3
0 0
EXHIBITS:
1.
2.
Letters from Standard and Poor's regarding change in credit rating.
Press release issued by Standard and Poor's.
e 0
i Standard & Poor’s Ratings Group,
A Division of McGraw-Hill, Inc.
Public Finance Department
25 Broadway
New York, New York 10004-1064
Robert A. Fuller
Managing Director
Telephone 21 2/208-1807
March 9, 1995
Ms. Lisa Hildabrand
Finance Director City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Re: $7,555,000 Carlsbad Public Improvement Corporation, California, CertiiJicates of
Participation (Hospital Grove), Series 1988, dated: June 1, 1988
Dear Ms. Hildabrand:
We have reviewed the latest financial report and other relevant data on the above debt. After
such review, we have changed the rating to ‘A-’ from ‘BBBp’. The rating was changed
primarily because of a resilient and diverse local economy that is exhibiting strong growth
after slowing somewhat during the statewide recession, and very strong financial management
in a challenging fiscal environment. The removal of the provisional ’p’ reflects the comple-
tion and acceptance of the project finance by the certificates of participation.
If you have any questions, please feel free to contact us.
Very truly yours,
ed
cc: Mr. Jim Cervantes
Stone & Youngberg
15260 Ventura Blvd. - Suite 900
Sherman Oaks, CA 91403
a
0 a
Standard & Poor‘s Ratings Group,
A Division of McGraw-Hill, Inc.
Public Finance Department
25 Broadway
New York, New York 10004-1 064
Robert A. Fuller
Managing Director Telephone 21 2/208-1807
March 9, 1995
Ms. Lisa Hildabrand
Finance Director
City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Re:
Dear Ms. Hildabrand:
We have reviewed the latest financial report and other relevant data on the above debt. After
such review, we have changed the rating to ‘A-’ from ‘BBB’. The rating was changed
primarily because of a resilient and diverse local economy that is exhibiting strong growth
after slowing somewhat during the statewide recession, and very strong financial management
in a challenging fiscal environment.
If you have any questions, please feel free to contact us.
$250,000 Carlsbad Parking Authority, California, Lease Series 1969
ed
cc: Mi-. Jim Cewainies
Stone & Youngberg
15260 Ventura Blvd. - Suite 900
Sherman Oaks, CA 91403
$!I
I e a
ID: P26 TIK: HEADLINE; S&P Raises Carlsbad Pub Imp & Parking Auth Rtgs To A-
Improvement Corp., calif.'s certificates of participation (COP) series 1988 dated June 1, 1988, issued for Hosp Grove, to Single-'A'-m5.nUS from triple-'B'.
revenue bonds series 1969 to single-'A'-hinus from triple-'B'. Both leases are
general fund obligations of the city of Carlsbad, Calif.
is exhibiting strong growth after slowing somewhat during the recent statewide recession. Also factored in the upgrade is the city's very strong financial
management in a challenging fiscal environment characterized by recessionary pressure on revenues and state actions that shifted property taxes and other
revenues away from the city.
miles north of San Diego); high wealth and income levels: a strong financial
position, with a high fund balance and available financial flexibility; and a
moderate debt burden with manageable capital needs. The series 1988 COP rating
also incorporates the moderate essentiality OP Hosp Grove, an open space project,
and strong legal provisions, while the Parking Authority lease rating includes the
high essentiality of the project and slightly weaker legal provisions.
Carlsbad's economy held up well. Carlsbad was one of only four cities in the counfy to gain jobs between 1990-1992. The city's economic base is diverse, with
strengths in retail, manufacturing, and a growing group of golf equipment
producers.
Economically sensitive revenues have rebounded strongly from the recession,
with an 18% jump in sales tax collections in fiscal 1994 and a 1.7% increase in transient occupancy (hotel) taxes. Both these revenues continued to show gains in
the first half of fiscal 1995. Revenues from building also have rebounded, and
building permits were up 95% in the first half of 1995. However, property taxes
continue to lag, falling 1.1% in 1994 and a further 2.5% in 1995 because of
aggressive assessment appeals by some of the city's commercial and industrial property owners.
As a result of strong fiscal management, the city's financial position remains solid despite negative revenue growth since 1990. The unreserved general
fund balance ended fiscal 1994 at $11.3 million, or 31% of expenditures, about the
same as 1990, and substantially higher than the levels maintained in the 1980s.
The fiscal 1995 budget is balanced, although a moderate drawdown of reserves is
planned for one-time expenditures including early debt retirement.
2.48 of true value. Debt service carrying charges comprise a manageable 7.4% of
expenditures. Amortization is rapid, with the Parking Authority lease maturing in
1996 and the Hosp Grove COPS due in 14 years.
NY -- StP Creditwire 3/8/95 -- SCP xaises its rating on Carlsbad Public
S&P also raises its rating on Carlsbad Parking Authority, Calif.'s lease
The ratings upgrades are based on a resilient and diverse local economy that
Other credit factors include the city's location on the Pacific Coast (35
Although the recession slowed building and job creation in the city,
The debt burden is moderate, with overall net debt at $2,058 per capita, or
OUTLOOK: Stable.
Stability is demonstrated by the city's economic resiliency during a period
of severe recessionary stress and management's continued commitment to balanced
budgets despite negative revenue growth, SBP said. -- CreditWire
Contact: Liz Sweeney (212) 208-8311,
Steve Nelli (212) 208-8975.
TOTAL P. 02