S&P: Howard Bend Levee District, MO Improvement Bond Ratings Lowered On Tax Base Concentration And Development Status
We had placed the ratings on CreditWatch with negative implications following the discovery of an error in the application of our criteria. The error was in relation to not applying stress tests as required by our special-purpose districts criteria, published June 14, 2007 on RatingsDirect. At bond issuance and in subsequent reviews, we determined that the inherent flexibilities in the levy allowed the district to pass certain sensitivity analyses without performing the stress tests. After further clarification, we determined that levy limitations may result in the sensitivity analyses' not always being passed.
"The rating action reflects significant weaknesses under the key sensitivity analyses of our criteria, which center on the district's highly concentrated tax base and largely undeveloped nature," said S&P Global Ratings credit analyst Benjamin Gallovic.
The stable outlook reflects our anticipation that the district will have limited additional debt needs while maintaining good value-to-lien ratios.