LOS ANGELES — Moody's Investors Service boosted by four notches to A2 $97.4 million in tax allocation bond debt managed by the successor agency to Westminster, Calif.'s redevelopment agency.
The bonds were upgraded from Baa3 in a follow-up to a review Moody's began June 24 on all of the California TABs it rates, according to the Aug. 17 report.
"Three years into the post-dissolution process, the administrative risks related to the payment of debt service have significantly lessened, so we are now placing greater weight on the fundamental project area characteristics and some of the positive features of the dissolution legislation including the closed lien status of the bonds," Moody's analysts wrote.
The upgrade to A2 primarily reflects the successor agency's large, growing tax base, history of strong debt service coverage levels and modest taxpayer concentration. The rating additionally incorporates the relatively low incremental to total assessment value ratio and below average residential income profile of the city, Moody's wrote.
The rating takes into account the successor agency's successful adaptation to post dissolution processes and administrative procedures and the rating agency's expectation that this trend will continue.
The rating also incorporates Moody's "generally positive assessment of the implementation of redevelopment agency (RDA) dissolution legislation by most successor agencies over the last three
years, leading to timely payment of debt service on California TABs."
In 2012, state legislation dissolved all California redevelopment agencies, replacing them with successor agencies to serve as fiduciary agents.