Fitch Ratings has upgraded Southlake Parks Development Corporation (SPDC) sales tax revenue bonds to ‘AA+’ from ‘AA-‘ and has assigned a ‘AA+’ rating to Southlake Community Enhancement and Development Corporation (SCEDC) bonds. Fitch also affirmed the City’s ‘AAA’ Issuer Default Rating (IDR).
The ‘AA+’ ratings “reflect Fitch’s expectation of continued solid growth in sales tax revenues and strong debt service coverage that provides ample cushion to absorb a cyclical downturn,” according to a release issued by Fitch.
The SPDC rating upgrade is applicable to $14.8 million in outstanding sales tax revenue bonds issued for park land acquisition and development. Bonds are repaid from proceeds of a voter-approved half-cent sales and use tax levied for the benefit of the Corporation’s activities. The rating has been upgraded two steps from ‘AA-“.
The SCEDC issue will fund the construction of Phase 2 of The Marq Southlake, a recreation center. In May 2015, voters repurposed a portion of a sales tax levy previously approved for crime control purposes to promote economic development and to fund a community recreation center. (Today, a 3/8 cent sales tax supports the SCEDC, while 1/8 remains committed to crime control programs, most notably the School Resource Officer Program.)
The Corporation/City will issue $26.7 million sales tax revenue bonds for The Marq through a competitive sale on June 7.
“Fitch’s ratings exceeded our expectations,” said Chief Financial Officer Sharen Jackson. “We’re so pleased to achieve high credit ratings, but more importantly we are excited about the opportunity to continue to build a wonderful community.”