Fitch Ratings this week downgraded its rating to BBB-minus from BBB-plus on the Summit County Port Authority bond fund’s outstanding $40.2 million of revenue bonds. The debt remains on negative negative at the lower rating.
Fitch put all six of the state’s port authority bond fund programs on negative watch late last year amid the possibility of increasing loan defaults.
Earlier this year Fitch cut its rating on the Toledo-Lucas County Port Authority’s Northwest Ohio Bond Fund and its implied revenue rating on the Cleveland-Cuyahoga County Port Authority.
The Summit County agency created its bond fund in 2004 to boost economic development in Summit and other counties. The fund has 13 borrowers.
The downgrade reflects in part the lack of available pledged resources to offset loan losses. Other negative factors include the small number of borrowers that are part of the bond fund program, the high number of loans that were issued between 2005 and 2008, and the “below-average quality” of the borrowers’ financial disclosures.
The bond fund’s combined reserves total $14.6 million, or 36.4%, of the outstanding debt. There is also $1.3 million in loan-specific additional reserves, Fitch said.