Moody's Investors Service has assigned a Baa2 underlying rating on Louisiana Public Facilities Authority's $85.2 million revenue refunding bonds, Series 2015, and downgraded to Baa2 from Baa1 the rating on Series 2007 revenue bonds issued by the authority that are secured by the same pledged revenues.
The outlook is negative.
The bonds are issued by the Louisiana Public Facilities Authority and payable from lease payments to be made by the Nineteenth Judicial District Building Commission, which, in turn, are secured by dedicated revenues of the court system assessed for the sole purpose of paying for construction of the new courthouse.
The Baa2 rating reflects the economic strength of the Baton Rouge area, yet the very narrow nature of the special tax pledge. The rating also takes into consideration adequate legal provisions for the bonds, including a debt service reserve which is expected to be funded with a surety, as well as additional liquidity set aside in a rate stabilization account.
The rating downgrade reflects the declining revenue trend that has experienced volatility in recent years as well as weak total collections that do not currently meet annual debt service requirements.
