MOODY'S AFFIRMS Baa1 RATING ON OCEANSIDE CDC'S SR. LIEN TABS

Posted on: December 21, 2009, 1:33 pm

NEW YORK, Dec 21, 2009 -- Moody's Investors Service has affirmed the Baa1 rating for the Community Development Commission of the City of Oceanside's Downtown Redevelopment Project 2003 Refunding Tax Allocation Bonds (TABs). The project area of the TABs is quite small for the rating level and is only 375 acres. Despite the geographic concentration, the project area has an expansive assessed valuation of $1.1 billion. Additional comfort is derived from the fact that the tax base grew 1.5% in 2010 during a time when many assessed valuations around the state contracted. The tax base is well diversified with the top ten taxpayers accounting for only 22.4% of the total. This level of diversification is solid for a California Baa1 TAB issuer and is even more impressive considering the small size of the area. A significant portion of the recent economic activity is attributable to the community's popularity as a far-suburb to both San Diego and Orange County, which are each large and vital economic engines for Southern California. The city also has a long-term economic anchor in the presence of Camp Pendleton Marine Corp Base. The area's rapid economic expansion has resulted in a five-year average annual growth rate of a well above average 14.2%. Consequently, the commission's revenue from tax increment has grown to provide 4.52 time coverage of the senior lien MADS. Moody's expects that coverage will remain very strong since the commission has covenanted not to add any senior lien parity debt. The commission has additional TABs that are secured on a subordinate basis to the 2003 and 2004 TABs. Total MADS coverage is sound at 1.51 times. The commission's 2003 and 2004 TABs are secured by a senior pledge of tax increment revenue derived from the downtown redevelopment project area...

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