Riverside, Calif. received an F1-plus rating and a stable outlook from Fitch Ratings ahead of plans to refund $30 million in taxable pension obligation bond anticipation notes.
The current offering will refund all of the city's outstanding taxable pension obligations BANs.
According to analysts, the refinancing risk of the BANs is mitigated by the city's significant liquidity. According to the city, it has access to $353 million in interfund borrowing from various funds, including electric, water, and sewer if needed.
The 2013 Series A BANs are expected to sell via negotiation on May 15.
According to analysts, the city's debt is moderate and its pension plans are well-funded; however variable rate and short term obligations represent a combined 40% of total debt exposing the city to liquidity and market risk.
The F1-plus rating on the BANs reflects anticipated market access based on the city's long-term AA rating as well as its access to significant internal liquidity, Fitch analysts said.
The COPs, lease revenue bonds, and POBs are rated one notch below the GO bonds as they are payable solely from any legally available funds. The A-plus lease revenue COP rating further reflects the non-essential nature of the leased assets.
The ratings agency also affirmed four series of bonds issued by Riverside, CA: $16.1 million GO bonds, series 2004 at AA; $22.6 million taxable pension obligation bonds series 2005A at AA-minus; $20.7 million COPs series 2010 at AA-minus; and $19.5 million lease revenue COPs, series 2006 at A-plus.
The city, the county seat of Riverside County, is about 60 miles east of downtown Los Angeles. The twelfth-largest city in California, Riverside encompasses 81.5 square miles and a population of 308,511.