For the second time in three months, Standard & Poor's has upgraded its long-term rating on the Cleveland-Cuyahoga County Port Authority's bond fund program, this time due to a new letter of credit.
The ratings agency now rates the authority BBB-plus. In September, it boosted the rating to BBB from BBB-minus. That upgrade reflects a "strong enterprise risk profile" as well as an "adequate" financial risk profile, analysts said. At the time the ratings agency warned that a possible challenge is a $9 million letter of credit, with negative provisions, from Fifth Third Bank that was part of the program reserve fund.
The port authority since September has secured a new letter of credit with Akron-based FirstMerit Bank NA, officials said. "This action is welcome and will translate into lower costs for borrowers, making our program even more competitive," Will Friedman, the port's president and CEO, said in a statement. "Our goal was to increase the rating on our program in 2012 -- and we accomplished that twice."
The upgrade comes despite voters' rejection in November of a property tax increase that would have reportedly raised $90 million to finance an economic development program for Cleveland's waterfront.
Most of the agency's development projects are located across a five-county region in northeast Ohio.
Since 1997 the authority has issued roughly $129 million of bonds for 29 projects. It currently has $65.7 million of debt outstanding.