Fitch Ratings said it has upgraded to A from A-minus $68,295,000 fixed-rate revenue bonds series 2007A, issued by Baltimore County, Md., issued on behalf of Oak Crest Village, Inc.
The rating outlook is revised to stable from positive.
The bonds are secured by a revenue pledge, mortgage, and debt service reserve fund.
The upgrade to A reflects the strength of OCV's operating performance coupled with continued liquidity growth that offset concerns about OCV's multiphase capital plans.
From May 31, 2013 to May 31, 2014, OCV increased in unrestricted cash and investments by $15.4 million (a 16% increase), with all of OCV's liquidity ratios now comparing well with Fitch's A category medians.
In 2013, most of OCV's operating ratios exceeded the A medians, including net operating margin-adjusted of 27% and debt service coverage of 4.9x, both better than their respective A medians.
A significant credit strength supporting the higher rating is OCV's consistent revenue-only debt service coverage. Revenue-only coverage has averaged 2.2x over the last four audited years and was at 2.1x in the five-month interim period. OCV's debt load is manageable as reflected by maximum annual debt service (MADS) as a percentage of revenue of 6% relative to the A median of 8.4%.
