Bernalillo County is taking advantage of its strong ratings in a $27.3 million refunding of general obligation and gross receipts tax bonds.
The negotiated deal that could price this week includes $15.3 million of GOs and $12 million of GRT bonds.
The GO bonds are rated AAA by Fitch Ratings, while the GRT bonds are one notch lower at AA-plus. Standard & Poor’s, which rated the county’s GOs at AAA in December, has not yet issued its report on the upcoming deal. Moody’s Investors Service assigned a Aaa rating to the GOs after recalibrating the former rating of Aa1.
“The county’s role as New Mexico’s principal population center has resulted in a large GRT revenue base,” Fitch analysts noted. “However, due to a notable slowdown in housing construction, GRT revenues have declined moderately, although recent trends indicate stabilization.”
GRT revenue fell 4.9% in fiscal 2009, due in part to the completion of numerous major construction projects. The fiscal 2010 estimate points to a 4% decline.
“Despite GRT declines, the debt-service coverage of the county’s GRT revenue bonds remains solid,” Fitch said. “Furthermore, the county does not plan to further leverage this revenue stream.”
Bernalillo County has an estimated population of 630,737 as of 2008, or about 30% of New Mexico’s population. The county includes Albuquerque, the state’s largest city.