S&P: Longview, TX Rating Outlook Revised To Negative On Possible Downgrade Within Two Years
"The negative outlook reflects our view that there's a one-in-three chance we could lower the rating in the next two years should the city's economic metrics not improve, its financial performance were to weaken, or if its debt and contingent liability profile were to weaken due in part to a large pension liability for its firefighters plan," said S&P Global Ratings credit analyst Oscar Padilla.
The 2016 bonds constitute direct obligations of the city payable from its levy of an annual ad valorem tax on all taxable property in the city, within the limits prescribed by law. The maximum allowable rate in Texas is $2.50 per $100 of assessed value for all purposes, with the portion dedicated to debt service limited to $1.50. The city's levy is well below the maximum, at 50.99 cents, of which 12.99 is dedicated for debt service. Proceeds will be used to support capital improvements and to refund outstanding debt for debt service savings.