Moody's Investors Service said it has upgraded to Aa3 from A1 the rating on the Industrial Development Authority of the town of Front Royal and the county of Warren, Va.'s $60.5 million lease revenue bonds, Series 2004B.
The bonds are secured by a lease agreement with Warren County (Aa2), which requires the county to make annually appropriated basic rent payments from general county revenues. Proceeds of the bonds were used to fund the construction of a new high school and library, conversion of a middle school into a high school, and the renovation of a community baseball stadium.
The upgrade to Aa3 reflects the improved underlying credit quality of Warren County including its moderately-sized tax base with above-average wealth levels, strong reserve position, and above-average, but manageable debt burden.
The rating also reflects the essential nature of the majority of financed projects, which helps to mitigate the risk of non-appropriation, as well as satisfactory legal provisions.
