S&P: Coachella Financing Authority, CA 2016 Lease Revenue Bonds Assigned 'A+' Rating
"The rating on the LRBs reflects our opinion of the city's covenant to annually budget and appropriate for lease payments, as well as our view of Coachella's weak economy, strong management, adequate budgetary performance, and very strong budgetary flexibility and liquidity," said S&P Global Ratings credit analyst Sarah Sullivant.
The LRBs are payable from base rental payments payable by the city to the authority for the use of certain leased property under the sublease. Although lease payments are subject to abatement risk in the event of damage to the leased property, the city covenants to maintain business interruption insurance in an amount equal to at least 24 months of lease payments. The leased property, which includes a fire station, a boxing and fitness center, and a corporate yard, meets or exceeds our threshold for acceptable seismic risk.