Sarasota County Gets Lift To BBB-Plus From S&P

Standard & Poor’s raised its long-term and underlying rating on Sarasota County, Fla.’s limited ad valorem tax bonds to BBB-plus from BBB and removed it from positive CreditWatch, where it was placed on Aug. 5.

The outlook is stable.

The upgrade reflects S&P’s view of improved debt service coverage to levels it considers adequate, resulting from the county’s use of $18.2 million of limited ad valorem bond proceeds — previously issued to purchase lands under the county’s environmentally sensitive lands and parkland program — and other lawfully available funds to defease and redeem a portion of the limited ad valorem bonds outstanding.

“The stable outlook reflects our view that while there is the potential for debt service coverage to decrease further based on continued weakness in the county’s taxable base, we expect that the rate of potential taxable value decreases in the next two years will likely be lower than in the past, resulting in the maintenance of what we consider adequate maximum annual debt service coverage,” said analyst Lindsay Wilhelm.

The stable outlook reflects Standard & Poor’s opinion that current coverage levels provide some cushion against a moderate level of decreases over a two-year horizon.

However, should the level of decreases accelerate or fail to subside, it could lead to a negative rating action.

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