Moody's Investors Service said it has assigned a Aa3 rating to Orange County, Fla.'s $159 million tourist development tax refunding revenue bonds, Series 2015, and upgraded the rating on the county's outstanding parity bonds to Aa3 from A1.
This rating action affects approximately $733 million in debt, including this sale. The outlook is stable.
The upgrade to Aa3 reflects an improved debt service coverage on a substantial amount of tourist development tax revenue. The upgrade also takes into account the outsized importance tourism represents to the local economy and the resiliency of the TDT revenues.
In the past 30 years TDT revenues have declined in three years only and in each case the decline was followed by a strong increase in revenue. The rating also factors in the county's extremely robust and diverse local economy and strong legal pledge, including a cash-funded debt service reserve fund.
The one-notch distinction with the county's Aa2 sales and public service tax bond ratings reflects the narrower economic base off of which the county levies TDT taxes than its sales and public service taxes.
