Moody’s Investors Service last week downgraded Hillsborough County, Fla.’s community-investment tax revenue bonds to A1 from Aa2, and lowered the county’s court facilities refunding revenue bonds to A1 from Aa3.
The downgrades affected $303.4 million of CIT bonds and $31.9 million of court facility bonds.
Moody’s said the downgrade on the CIT bonds is based on reduced levels of debt service coverage from a highly-leveraged revenue stream that is inconsistent with a high-grade rating, as well as the slowly recovering broader local economy.
The rating on the court facility bonds is based on a rapidly declining level of court surcharge revenues, and the fact that the bonds mature after the CIT expires, among other factors.
The downgrade on the community investment tax comes in advance of the county’s planned $83.1 million refunding bond issue, which is expected to sell next week, according to Moody’s.
While Moody’s assigned its lower A1 rating to the CIT refunding bonds, Fitch Ratings and Standard & Poor’s maintained their AA ratings.