Released By Osceola County Public Information Office
Citing Osceola County’s general creditworthiness, the strong regional economy and the stability of the pledged revenue stream, S&P Global Ratings issued an A+ rating for a refunding of an $11.85 million issue of 5th cent Tourist Development Tax bonds.
The County is moving forward with the refunding in order to take advantage of better rates resulting in a savings of more than $1 million dollars over the remaining life of the loan.
The rating incorporates the strength and stability of the pledged revenue stream as well as the “obligor’s creditworthiness,” S&P analysts wrote. The A+/A1 rating signifies that the County has stable financial backing and ample cash reserves with a very low risk of default for investors.
“The rating agencies that review our creditworthiness continue to issue positive statements about the fiscally responsible manner in which Osceola County government operates,” said Commission Chairwoman Cheryl Grieb. “This is directly attributable to the sound management principles we have embraced. Positive ratings are earned – not given, so the public should take comfort in the confidence and praise financial professionals use to describe our practices and overall financial position.”
The outlook is stable – reflective of “S&P Global Ratings’ expectation that the county will maintain DSC (debt service coverage) at levels we consider at least strong over the near term. The county’s expanding economy and growing hotel and short-term rental base further support the outlook. We do not expect to change the rating within the two-year outlook horizon,” analysts wrote.
Going beyond TDT revenue, S&P assesses the county’s general operations because it views overall creditworthiness as a key determinant of the ability to pay all of obligations.
“Our assessment of Osceola County’s general creditworthiness reflects its solid finances and very strong financial management framework that is somewhat offset by an economic base with below-average resident incomes and property wealth. However, recent economic growth in the county is strong, and we believe participation in the Orlando-Kissimmee-Sanford MSA will contribute to stability in this regard over the near term.” They went on to say, “Given stable economic growth and a demonstrated track record of maintaining strong finances, we anticipate general credit stability for Osceola County over the near term.”
Ratings such as those issued by S&P Global are important because they are an independent, unbiased analysis of the credit quality and fiscal management of the County over an extended number of years. S&P provides international financial research on bonds issued by commercial and government entities. The company ranks the creditworthiness of borrowers using a standardized ratings scale.