BRADENTON, Fla. — Orange County, Fla., officials hope investors take note of this week's $170 million tourist tax refunding deal that will come to market with three rating upgrades.
Rating analysts cited substantial growth in hotel revenues and a booming local economy.
The offering prices competitively on Thursday, and is preliminarily structured with serial bonds maturing between 2016 and 2031.
Bond proceeds will current refund all or portions of the county's 2005 tourist tax bonds.
The county anticipates present value savings of more than $15 million or 10% of refunded par, according to Fred Winterkamp, manager of Orange County's Fiscal and Business Service Division.
The bonds are rated AA by Fitch Ratings, Aa3 by Moody's Investors Service, and AA-minus by Standard & Poor's.
All three ratings represent a one-notch upgrades that are based on growth in pledged revenues and wide debt service coverage, as well as central Florida's strong economic base, analysts said.
"To get three upgrades and move entirely into the double-A sector we're certainly very pleased," Winterkamp said. "It's been a long time coming, and it's been a long educational process."
In 2014, the Orlando-Orange County area saw more than 62 million visitors, an all-time record that solidified the home of Florida's mega theme park region as the most visited destination in the nation, according to the Visit Orlando tourism association.
New hotels have opened and new entertainment venues have come on line, such as the recently opened 400-foot-tall Orlando Eye observation wheel, Walt Disney World's New Fantasyland, and The Wizarding World of Harry Potter - Diagon Alley at Universal Orlando Resort.
While growth in tourism and lodging is booming, Winterkamp said that new business and education are also pumping up the local economy.
Last month, the United States Tennis Association broke ground on its new headquarters in Lake Nona, home of southeast Orange County's billion dollar medical industry.
The University of Central Florida has become the second-largest institution in the nation with nearly 60,000 students.
"I think the thing that was remarkable was that we set out to tell this story about growth and the strength of the economy" while meeting with rating agency analysts, Winterkamp said. "All of these areas are doing well, and government's partnering with them. That's really the story."
According to Fitch, the county's tourist development tax revenues experienced a healthy annual increase of 7% in fiscal 2014, the fifth consecutive year of growth excluding a one-time revenue enhancement after a 15% drop in fiscal 2009.
"The overall TDT gain during this period was 40.7%, spurred by surging tourist activity," said Fitch analyst Larry Levitz. "Hotel occupancy and room rates are at their highest level in at least the past 10 years."
Collections in the first six month of fiscal 2015 are up 12.9% over same period in fiscal 2014.
Tourist tax revenue growth boosted fiscal 2014 debt service coverage to a 2.3 times maximum annual debt service.
In addition to rating the tourist tax refunding bond pricing Thursday, Fitch also affirmed Orange County's implied unlimited tax general obligation AAA rating.
Analysts cited the county's "strong financial management, broad-based tourist-oriented economy and manageable debt load."
Public Financial Management Inc. and M2 Management Inc. are co-financial advisors for the refunding.
Greenberg Traurig PA and the Law Offices of Debi V. Rumph are co-bond and disclosure counsel.
