New York, November 09, 2012 -- Moody's Rating
Issue: Public Improvement Serial Bonds, 2012 Series A; Rating: Aa2; Sale Amount: $3,772,000; Expected Sale Date: 11-23-2012; Rating Description: General Obligation
Issue: Public Improvement Refunding Serial Bonds, 2012; Rating: Aa2; Sale Amount: $6,110,000; Expected Sale Date: 11-23-2012; Rating Description: General Obligation
Issue: Bond Anticipation Notes, 2012 Series A; Rating: MIG 1; Sale Amount:$2,256,533; Expected Sale Date: 11-23-2012; Rating Description: Note: Bond Anticipation
Moody's Investors Service has assigned a Aa2 rating to the Village of Ossining's (NY) $3.8 million Public Improvement Serial Bonds 2012 Series A, and to $6.1 million Public Improvement Refunding Bonds, 2012 and a MIG 1 to $2.3 million Bond Anticipation Notes, 2012 Series A. Concurrently, Moody's has affirmed the Aa2 rating on $25 million in previously issued long-term general obligation debt outstanding. Proceeds of the serial bonds will be used for reservoir Improvements ($2.5 million), to fund tax appeals ($700,000) and street-scape projects ($500K). Proceeds from the sale of the notes will be used to redeem $131,000 of currently outstanding notes, with an additional $2.1 million of new money for various capital improvements. The bonds and notes are secured by the village's general obligation unlimited tax pledge.
SUMMARY RATING RATIONALE
The Aa2 rating reflects the village's stable financial operations with strong reserve levels, moderately sized tax base with above average wealth levels, and manageable debt burden. The MIG 1 rating additionally incorporates the village's demonstrated market access and strong underlying credit quality.
Effective January 1, 2012, all local governments in New York State are subject to a property tax cap which limits levy increases to 2% or the rate of inflation, whichever is lower. While school district debt has been exempted from the cap, debt has not been exempted for all other local governments. Moody's believes that the risks associated with the property tax cap remain unchanged and we do not foresee making a rating distinction between debt not subject to the cap. For more information regarding the property tax cap please reference the Special Comment "New York Local Governments' Debt Under New Property Tax Cap to Be Rated the Same as Unlimited Tax General Obligation Debt " released May 14, 2012.
-Moderately sized tax base
-Higher than average wealth levels
-Exposure to economically sensitive revenues
-Moderate taxpayer concentration
What could make the rating change - UP
-- A return to growth in economically sensitive revenues
-- Expansion of tax base through new development and real estate value appreciation
-- Improvements of Socioeconomic and demographic profiles
What could make the rating change - DOWN
-- Protracted structural budget imbalance causing significant reduction of General Fund balance
-- Continued tax appeals which materially decrease the size of the assessed value or cause substantially payouts
-- Deterioration of the village's tax base and demographic profile
The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.
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Vito Galluccio Analyst Public Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Julie Beglin Vice President - Senior Analyst Public Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.
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