Standard & Poor's Ratings Services said Tuesday it raised to BBB-plus from BBB its rating on Hillsborough County School District, Fla.'s sales tax revenue bonds. The outlook is stable.
"The upgrade reflects our view of a continued improvement in the district's pledged revenue collections, with year-over-year growth in fiscal years 2011 and 2012," said Standard & Poor's credit analyst Andrew Teras.
Factors supporting the rating include: Hillsborough County's (AAA general obligation rating) broad and diverse economy, which serves as the economic base for this tax, and is showing signs of a modest recovery from the recent recession; additional cash reserves of approximately $27 million (unaudited), which, while not pledged to the bonds, the school district is currently reserving for debt service on the sales tax bonds; and the shortening life of the tax (sunset in fiscal 2027) and the absence of plans for additional debt secured by the pledged revenue.
Offsetting factors include: adequate, but thin, 1.1x maximum annual debt service coverage based on fiscal 2011 revenues; and a significant 23% drop in the sales tax revenue over fiscal 2007-2010 due to the recession.
Hillsborough County is located on the central-west coast of Florida and has Tampa as its county seat.
