Goodyear received upgrades on its general obligation debt, water and sewer revenue debt, and improvement bonds from Standard & Poor’s ahead of a $44.5 million sale.
Analysts raised the GO credit of the growing suburb southwest of Phoenix to A-plus due to “strong proactive management practices and policies, which are expected to ensure sound financial results over time.”
Peacock, Hislop, Staley & Given Inc. is financial adviser to the city, which sold $44.5 million of GOs in the competitive market yesterday. Proceeds will fund improvements to streets and the water and sewer system. Following the sale, Goodyear has about $173.5 million of authorized but unissued GO debt and $134.7 million of debt outstanding. Gust Rosenfeld PC is the city’s bond counsel.
Standard & Poor’s upgraded the improvement bonds issued by Goodyear on behalf of the McDowell Road Commercial Corridor Improvement District project to BBB-plus, and the city’s utility debt was upgraded two notches to A-minus from BBB.
“The two-notch upgrade reflects management’s willingness to raise rates to ensure that recurring revenues provide debt service coverage of more than one time,” said credit analyst Edward McGlade.
The improvement bonds are “secured through special assessments levied against property within the improvement district and, more importantly, the contingent support provided by the city’s assessment debt service fund loan covenant,” according to Standard & Poor’s.
Goodyear’s population has nearly tripled since 2000 to almost 56,000 in 2007. The city has averaged annual population growth of 16% this decade.
