Approximately $43 million in debt affected including the current issue
New York, November 30, 2012 -- Moody's Rating
Issue: Lease Revenue Refunding Bonds, 2013 Series A; Rating: A1; Sale Amount: $32,500,000; Expected Sale Date: 12/03/2012; Rating Description: Lease Rental: Appropriation
Moody's Investors Service has assigned an A1 rating to the Shasta County (CA) Lease Revenue Refunding Bonds, 2013 Series A. We have also affirmed the county's stable outlook and Aa2 Issuer Rating and the A1 rating for the county's existing lease revenue obligations. The bonds are secured by lease payments made from the county to the Shasta Joint Powers Financing Authority. These payments are made in exchange for the use and occupancy of the leased assets, which are County Administration Building, and adjacent parking structure and the District Attorney/Veterans Services Building. The rating action reflects the county's solid fiscal position including satisfactory cash levels, well-sized though recently pressured tax base, the legal covenants of the bonds and the county's modest debt profile.
The two notch rating distinction between the current lease rating and the county's Issuer Rating represents Moody's standard notching for essential purpose, fixed asset leases relative to a California issuer's general obligation rating. Broadly speaking the two notches reflect the risk of abatement, and the narrower, general fund security pledge for leases compared to the unlimited property tax pledge securing general obligation bonds.
-Solid general fund fiscal position
-Modest direct debt burden
-Sound budget management through difficult funding environment
-Still pressured local economy that has undergone recent tax base contraction
-Still pressured state economy
WHAT COULD CHANGE THE RATING UP
-Material improvement to the fiscal position
-Sustained improvement to the local economy
-Increased certainty regarding state support for counties
WHAT COULD CHANGE THE RATING DOWN
-Material decline in cash or general fund balance
-Significant deterioration of the local economy
The principal methodology used in this rating was The Fundamentals of Credit Analysis for Lease-Backed Municipal Obligations published in December 2011. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.
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Michael WertzAsst Vice President - Analyst Public Finance Group Moody'sInvestors Service, Inc.One Front Street Suite 1900 San Francisco, CA 94111 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Julian Edward Metcalf Associate 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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