DALLAS – Moody’s Investors Service is maintaining a negative outlook on Bexar County’s triple-A rating based on the San Antonio area’s dependence on federal spending, the agency said.
The outlook applies to $93 million of certificates of obligation the county is preparing to issue for various capital improvements in and around San Antonio.
“The negative outlook relates to Moody's Aug. 2 decision to confirm the Aaa government bond rating of the United States and assign a negative outlook, and to our Dec. 7 assessment of Bexar County's exposure to indirect linkages to the federal government,” wrote Moody’s analyst Adebola Kushimo.
Although the San Antonio area economy is considered diverse, three of the top ten employers are military installations employing 85,000 people or about 10.5% of the labor force, according to Moody’s. The military bases benefited from the Defense Department's Base Realignment and Closure process. Since 2006, more than $3 billion in construction projects have been launched and more than 12,000 military personnel added.
Standard & Poor’s has not rated the upcoming issue but previously rated Bexar County’s general obligation debt at AA-plus with a stable outlook. Fitch Ratings rates the county’s GO debt triple-A with stable outlook but has not yet rated this deal.
S&P downgraded U.S. debt on Aug. 5 2011 after repeated standoffs in Congress over the debt ceiling and threats to force a default on the nation’s debt. The action brought a cascade of downgrades on local governments whose economies were based on high concentrations of federal installations.
With a population of 1.4 million, Bexar County is one of the fastest growing metro areas in Texas. The county commissioners work closely with the city of San Antonio on various projects, including flood control and improvements to the San Antonio River.
Tension over the federal debt ceiling eased temporarily this week when Republicans agreed to suspend the debt limit until May.