BRADENTON, Fla. — Higher debt service coverage won Florida's environmental restoration bonds two rating upgrades ahead of a planned competitive sale.
Moody's Investors Service raised its ratings to Aa3 from A1 on the state's Everglades Restoration revenue bonds and Florida Forever revenue bonds on Aug. 20. The bonds are secured by documentary stamp taxes on real estate sales.
Moody's also assigned the Aa3 rating to $46.5 million of everglades restoration revenue bonds that will be issued through the Department of Environmental Protection after an 18-hour notice.
Bond proceeds will be used to provide grants to governments in the Florida Keys to finance system systems. Those systems are designed to provide better treatment that ultimately protects the Everglades marine environment.
Fitch Ratings upgraded its ratings on the environmental bonds to AA-minus from A, and assigned the higher rating to the upcoming deal.
Standard & Poor's maintained its AA-minus ratings.
All ratings have a stable outlook.
Analysts cited a recent change in state law expanding the amount of pledged documentary stamp taxes to 100% of collections from the prior 63.31% of collections.
The higher amount of pledged revenue "increases projected debt service coverage well above historic highs and provides important additional cushion for this very volatile revenue stream," said Fitch analyst Karen Krop.
Revenue collections securing the debt currently stands at $1.15 billion, and collections are expected to climb as Florida's real estate climate continues to regain footing since the recession.
In addition to robust debt service coverage, Fitch said its upgrade reflects strong growth in tax revenues as well as a declining debt service schedule.
Squire Patton Boggs LLP is bond counsel.