Aaa rating applies to $19.3 million of post-sale GOLT debt
New York, August 22, 2012 --
Issue: General Obligation Limited Tax Municipal Building Refunding Bonds, Series 2012; Rating: Aaa; Sale Amount: $6,440,000; Expected Sale Date: 8/28/2012; Rating Description: General Obligation Limited Tax
Moody's Investors Service has assigned a Aaa rating to the City of Beachwood's (OH) $6.44 million General Obligation Limited Tax Municipal Building Refunding Bonds, Series 2012. Concurrently, Moody's has affirmed the Aaa rating on the city's long-term GOLT debt, of which $19.3 million will be outstanding following the current sale.
SUMMARY RATING RATIONALE
Debt service on the bonds is secured by the city's general obligation limited tax pledge, which is subject to the 9.2 mill limitation provided in the city's charter. Proceeds will be used to refund the city's outstanding Series 2004 general obligation limited tax bonds for expected present value interest savings. The Aaa rating reflects the city's sizeable and affluent tax base just east of Cleveland (general obligation rated A1/stable outlook), sound financial operations supported by healthy reserves and a recent increase in the income tax rate, and manageable debt profile.
- Affluent base with strong commercial and institutional presence
- Sound General Fund operations supported by long-term maintenance of healthy reserves
- Reliance on economically-sensitive income tax revenues to fund operations
- Moderate exposure to the state's repeal of the estate tax
WHAT COULD CHANGE THE RATING -- DOWN
- Significant declines in taxable values or weakening of the city's socioeconomic profile
- Material declines in the city's General Fund financial reserves
PRINCIPAL RATING METHODOLOGY
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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Matthew Butler Associate Analyst Public Finance Group Moody's FIS Domestic Sales Office - Chicago IL JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Jeffery YorgAsst Vice President - 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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