Standard & Poor's Ratings Services said it raised its rating to BB-plus from B on Harris County-Houston Sports Authority, Texas' existing junior-lien series 1998-B, 1998-C, 2001-B, and 2001-H bonds.
The outlook is stable. At the same time, Standard & Poor's raised its rating to BB-minus from B on the authority's third-lien series 2004A-3 bonds. The rating on the third-lien 2004A-3 bonds was placed on CreditWatch with positive implications.
The authority's junior-lien series 2001-B, 2001-C, and 2001-D bonds were repaid in May 2014. Repayment of these bonds was accelerated in 2009 in 10 semi-annual payments when the liquidity facility expired without being replaced.
The ratings on these accelerated bonds have been withdrawn since they are no longer outstanding. Therefore, the upgrades on the junior-lien and third-lien bonds mentioned above are due primarily to the authority's successful repayment of its accelerated junior-lien series 2001-B, 2001-C, and 2001-D bonds.
Furthermore, supporting the upgrade to some degree is ongoing economic and pledged revenue growth within the authority's taxing boundaries.
Standard & Poor's also affirmed its BBB rating on the authority's existing senior-lien 1998-A and 2001-I bonds. The outlook is stable. Finally, Standard & Poor's affirmed its BBB rating on the authority's senior-lien series 2001-A and 2001-G bonds and placed it on CreditWatch with positive implications.
"The rating actions reflect our view of a potential restructuring of the authority's existing debt," said Standard & Poor's credit analyst Omar Tabani.
The placement of the authority's senior-lien series 2001-A and 2001-G bonds on CreditWatch with positive implications reflect the upcoming restructuring of the authority's existing debt and the strengthening of reserve requirements and additional bonds tests.
Finally, placement of the authority's third-lien series 2004A-3 bonds on CreditWatch with positive implications reflects the likelihood that the rating will be raised once the potential refunding is completed, likely resulting in improved coverage on the third-lien bonds.
Authority revenues currently secure roughly $446 million of senior-lien bonds, $417 million of junior-lien bonds, $58 million of third-lien series 2004A-3 bonds, and roughly $145 million of unrated subordinate-lien loans and notes.
