Moody's Investors Service has upgraded to A1 from A2 all sales tax debt issued by the city of Corpus Christi, Texas' Business and Job Development Corporation.
The upgrade affects the corporation's $29 million in outstanding sales tax debt for the Seawall project and the A1 rating is being assigned to the corporation's $33.4 million sales tax revenue refunding bonds, Series 2013 (arena project), $8.34 million sales tax revenue refunding bonds, Series 2013 (baseball stadium project). All prior debt for the arena project and the baseball stadium is being refunded.
Proceeds from the bonds will be used to refund outstanding revenue debt for an estimated net present value savings of 10.3% on the arena bonds and 5.3% on the baseball stadium.
The bonds for the arena and the seawall project are each secured by separate 1/8th sales tax increments approved by voters on November 7, 2000, and the bonds for the baseball stadium are secured by a third 1/8th sales tax increment approved by voters on November 5, 2002.
Revenues from each 1/8th sales tax increment can only be used for the dedicated projects including the repayment of debt. The A1 ratings reflect increasing pledged revenues that support healthy debt service coverage, strong liquidity in each fund, and adequate legal covenants.
