• Wednesday, May 06, 2015
    Rating Action: Moody's upgrades to Aa3 from A1 Pearland Economic Development Corporation, TX sales tax bonds


    Rating Action: Moody's upgrades to Aa3 from A1 Pearland Economic Development Corporation, TX sales tax bonds

    Global Credit Research - 06 May 2015

    Aa3 applies to $15.2M of outstanding debt

    New York, May 06, 2015 -- Moody's Investors Service has upgraded Pearland Economic Development Corporation's, TX $15.2M in sales tax revenue bonds to Aa3.

    SUMMARY RATING RATIONALE
    The upgrade to Aa3 reflects Pearland Economic Development Corporation's strong pledged revenue growth, large, affluent tax base, and improving debt service coverage. The rating also reflects relatively weak legal requirements, somewhat mitigated by strong economic and financial performance.

    OUTLOOK
    Outlooks are usually not assigned to local government credits with this amount of debt outstanding

    WHAT COULD MAKE THE RATING GO UP
    • Continued growth of pledged revenues
    • Significantly improved debt service coverage

    WHAT COULD MAKE THE RATING GO DOWN
    • Significant decrease in debt service coverage through increased debt or lesser revenues
    • Volatility of pledge revenues and the surrounding economy

    OBLIGOR PROFILE
    The Pearland Economic Development Corporation is a non-profit industrial development corporation of the State of Texas created by the City of Pearland and organized exclusively for public purposes authorized by Section 4B of the Development Corporation Act of 1979 and codified as Chapters 501, 502 and 505 of the Texas Local Government Code. The corporation is a component unit of the city and member of the corporation's board of directors are appointed by the city council.

    LEGAL SECURITY
    The bonds are special obligations of the corporation payable from and secured by a lien and pledge of certain pledged revenues, which include the gross proceeds of a one-half (½) of one percent (1%) sales and use tax levied within the City of Pearland (Aa2 stable).

    USE OF PROCEEDS
    Not applicable.

    PRINCIPAL METHODOLOGY
    The principal methodology used in this rating was US Public Finance Special Tax Methodology published in January 2014. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

    REGULATORY DISCLOSURES
    For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

    Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

    Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

    Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

    Brady Olsen
    Associate Analyst
    Public Finance Group
    Moody's Investors Service, Inc.
    600 North Pearl Street
    Suite 2165
    Dallas, TX 75201
    U.S.A.
    JOURNALISTS: 212-553-0376
    SUBSCRIBERS: 212-553-1653

    Thomas Jacobs
    Senior Vice President
    Public Finance Group
    JOURNALISTS: 212-553-0376
    SUBSCRIBERS: 212-553-1653

    Releasing Office:
    Moody's Investors Service, Inc.
    250 Greenwich Street
    New York, NY 10007
    U.S.A.
    JOURNALISTS: 212-553-0376
    SUBSCRIBERS: 212-553-1653
  • Find us on google maps