Moody's Investors Service said it has upgraded the ratings of San Diego RDA's Successor Agency's ratings to Baa3 from Ba1 and assigned a stable outlook.
The ratings apply to housing and non-housing bonds as well as subordinate non-housing bonds.
The upgrade reflects the ample semi-annual debt service coverage provided by the total incremental revenues available to the successor agency for total tax increment secured debt service coverage.
Based on conservative estimates for 2014 debt service coverage for all debt, including senior and junior non-housing and all housing bonds is 2.0x, after payment of pass through obligations.
Also contributing to the rating are the following credit factors on an aggregated agency wide basis: extremely large total combined acreage of the project areas securing the combined debt; very large and diverse incremental assessed valuation (AV), relatively high increment to total AV ratio; and the recovering San Diego economy.
No rating distinction was made between the senior and junior bonds and housing and non-housing bonds, because with the ample semiannual coverage, all obligations are essentially the beneficiaries of 1.0x coverage after county withholds incremental revenues for pass through obligations.
The uniformity of the ratings also takes into account the fact that when the specific securities are evaluated based on their original legal provisions, the variations among them are not compelling enough to warrant distinctions.
