Fitch Ratings has affirmed its AAA on the Southern Ute Indian Tribe's $305 million of adjustable-rate bonds and maintained the notes rating at the top F1-plus with a stable outlook. The ratings were affirmed as part of the agency's routine surveillance.
Standard & Poor's also rates the SUIT's credit at AAA.
The Ute tribe's outstanding general obligation debt includes the Series 2001, 2007 and 2010 adjustable-rate bonds and a revolving credit facility with a $200 million commitment, about $140 million of which is currently drawn. The adjustable-rate bonds mature in 2027, 203l and 2040.
The revolving credit facility expires in March 2012. The adjustable-rate bonds are subject to optional tenders by investors. The SUIT is providing an internal liquidity facility in the form of a standby bond purchase agreement, under which it is obligated to purchase bonds that are tendered and are not successfully remarketed.
The Southern Ute Tribe has about 1,450 members and a reservation totaling 350,000 acres in southwestern Colorado. The tribal constitution, adopted in 1936, created a seven-member council elected at large to serve staggered three-year terms. Tribal services include education, social, health care and family services.
With most of its revenue coming from energy sources, the tribe operates two units, government and business.
"As these resources are depleting and non-renewable, SUIT has been seeking to diversify through business ventures in off-reservation energy exploration and production, as well as investments in private-equity ventures, real estate and construction," Fitch noted.