S&P Pulls TABs Down

Standard & Poor’s Monday lowered its long-term rating and underlying rating to BBB from A-minus on tax allocation bonds issued by the Banning Community Redevelopment Agency in California. The outlook was revised to stable from negative.

“The rating action reflects our view of the continuation of further declines in assessed value that cause lower debt coverage,” Standard & Poor’s analyst Alda Mostofi said in a news release.

Weaknesses include the project area’s fiscal 2012 maximum annual debt-service coverage of 1.06 times on the non-housing portion of the bonds and moderate volatility ratio of 0.32, the report said.

The project area consists of merged downtown and midway redevelopment project areas in which the agency aims to eliminate and prevent the spread of blight by constructing public improvements, providing and improving open space, and providing affordable housing opportunities.

The Series 2007 bonds are secured by revenue from a first lien on tax-increment revenues from the project area, net of low- and moderate-income housing, and senior tax-sharing payments. The stable outlook reflects the view of the project area’s moderate tax volatility ratio and potential for further assessed value decline.

Banning is a city of 29,000 residents in Riverside County, about 85 miles east of Los Angeles.

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