Fitch Ratings assigns its 'A' rating to the following issues of Bexar
County, TX:
--$46.1 million tax-exempt venue project revenue refunding bonds
(combined venue tax), series 2008A;
--$51.5 million taxable venue project revenue refunding bonds (combined
venue tax and license revenues), series 2008B;
--$5.6 million tax-exempt venue project revenue bonds (combined venue
tax), series 2008C;
--$5.9 million tax-exempt venue project revenue bonds (motor vehicle
rental tax), series 2008D.
Fitch also affirms its 'A' rating on the county's outstanding venue
project revenue bonds. All current offerings are scheduled to price the
week of August 25th via negotiation. The Rating Outlook is Stable.
Series A-C bonds are payable from a senior lien on the county's 1.75%
hotel occupancy tax (HOT) and a junior lien on the county's 5.0% motor
vehicle rental tax (MVRT). Series B is additionally payable from license
fee revenues. Series D bonds are payable solely from a senior lien on
the county's 5.0% MVRT. Bond proceeds will be used to refund all
outstanding venue project revenue bonds and finance the construction and
improvement of amateur sports projects and tourism projects.
The 'A' rating reflects the county's role as the top tourist destination
in Texas, ongoing expansion of hotel room capacity with major convention
center and resort hotels, strong voter support for the venue tax
extensions and diverse tourism related projects, slow principal pay-out,
and the inherent volatility of the pledged revenue streams during
economic downturns. Although debt service coverage is adequate in the
initial offering, planned annual issuances will lead to considerably
leveraged revenue streams. Notably, the county has negotiated long-term
operating agreements with numerous entities to assume the responsibility
of all of operations and maintenance costs of the numerous bond-financed
projects. The two new indentures that replace the previous indenture
somewhat dilute the original combined tax revenue pledge in which both
revenue streams were pledged, via a first lien, to the repayment of the
bonds. Texas's ongoing strength in exports, energy production, and low
home prices should help stabilize the disposable income and employment
of in-state residents, the origin of most visitors to the county.
Locally, numerous major commercial developments are expected to help
sustain the county's positive employment and tax base trends.
Bexar County, with an estimated 2008 population of 1.6 million, is home
to San Antonio.
