Fitch Ratings said it has upgraded the Cotati Community Redevelopment Agency, Calif., $6.4 million 2001 subordinate tax allocation bonds series A (Cotati Redevelopment Project) to A-plus from A.
The rating outlook is stable.
The subordinate 2001 TABs, series A (2001A) are secured by gross tax increment revenues, less certain fees, senior pass-throughs and the 20% housing set-aside. The 2001 subordinate TABs are on parity with the issuer's series 2004 TABs.
The 2001A TABs were originally secured by a subordinate lien on tax increment revenues after the payment of 1993 series bonds. When the 2004 TABs refunded the series 1993 and 2001B subordinate bonds, the series 2004 and 2001A became parity, secured by gross tax increment revenues net of certain fees, senior pass-throughs and the housing set-aside.
The upgrade reflects Fitch's refined analysis of surplus housing revenues, which Fitch now considers to be available to pay non-housing TAB debt service. The availability of these revenues materially improves the bonds' debt service coverage.
