S&P: Highlands Community Development District, FL's Series 2016 Special Assessment Refunding Bonds Rated 'BBB-'
The stable outlook reflects S&P Global Ratings' opinion that it does not expect to change the rating within its two-year outlook period. The rating service believes special assessment collections will likely remain sufficient to pay debt service on proposed obligations. S&P Global Ratings believes the assessment area's sufficient debt service reserve coverage and mature development support the outlook. However, the low overall value-to-lien ratio somewhat limits the rating.
"We could raise the rating if direct and overall value-to-lien ratios were to improve to levels we consider comparable with the district's higher-rated peers, coupled with increased and sustained assessed value growth and management maintaining strong debt service reserve coverage" said S&P Global Ratings credit analyst Belle Wu. "If assessed value were to decline, resulting in lower value-to-lien ratios; if debt service reserve coverage were to decrease; or if the demand for tax certificates were to diminish, we could lower the rating."
Non-ad valorem special debt assessments on benefited properties in the district secure the series 2016 bonds. Hillsborough County will collect the assessments on the district's behalf via the uniform-collection method.
Officials intend to use series 2016 bond proceeds to refund the district's series 2005 special assessment bonds outstanding.