OREANDA-NEWS. Fitch Ratings has affirmed its ratings on the following Central Platte Valley Metropolitan District, CO's general obligation (GO) bonds:

--\\$43 million GO refunding bonds, series 2013A at 'BBB-';
--\\$22.3 million GO refunding bonds, series 2014 at 'BB'.

The Rating Outlook is Stable.

SECURITY
The 2013A bonds are payable from an unlimited annual property tax levy on all property located within the original boundaries of the district. The 2014 bonds are payable from an unlimited annual property tax levy on all property located within the current boundaries of the district.

KEY RATING DRIVERS

HIGH CONCENTRATION; LIMITED BASE: The district's tax base is highly concentrated. Ongoing construction and future development is not projected to reduce concentration due to the small geographic size of the district.

TAX BASE DIFFERENTIALS/CONCENTRATION: The tax base that secures the 2014 bonds (the operating district) is a subset of the larger original district that secures the 2013A bonds. The lower rating on the operating district's 2014 bonds reflects a much higher tax payer concentration.

DOWNTOWN DEVELOPMENT BOOM: The district encompasses one of Denver's major redevelopment efforts. Its strategic downtown location is fueling rapid growth in apartments, condominiums, and commercial office buildings, aided by the concurrent development of the Regional Transportation District's (RTD) bus and rail transit hub on adjacent property. The district has more than recouped recessionary assessed value (AV) losses. Recent and ongoing building activity should ensure a positive trajectory for the district's taxable values for the next several years.

MANAGEABLE TAX INCREASES ASSUMED: Fitch believes development in the district is likely to continue, but the agency's base case includes only the value of existing properties. Total operating district tax rate increases needed to meet level debt service in this scenario, assuming no substantial further tax base declines, are of a magnitude Fitch believes would be manageable.

HIGH DEBT; LEVEL DEBT SERVICE: Overall debt is very high relative to market value and is amortized slowly. The completion of all infrastructure and lack of future debt plans should allow these metrics to improve slowly over time assuming at least modest tax base growth.

RATING SENSITIVITIES

SUSTAINED TAX BASE LOSSES: Large and sustained tax base losses could lead to negative rating pressure.

CONCENTRATION LIMITS UPWARD MOVEMENT: The very high tax base concentration limits the ratings to their current level.

CREDIT PROFILE
The Central Platte Valley Metropolitan District is located in lower downtown Denver and is in close proximity to Denver Union Station.

PARTIALLY DISTINCT TAX BASES
District bonds are secured by two distinct tax bases. The original 63 acre district secures the 2013A GO bonds. A smaller 38 acre subset of the original, the operating district, secures the 2014 GO bonds.

CONCENTRATION OVERRIDES STRONG GROWTH
The tax base composition of the district's original taxing area is balanced evenly between residential (45% of 2015 AV) and commercial (47% of AV). AV growth has more than recouped a 13.7% recessionary decline with strong gains of 28.4% and 14.6% increases in 2014 and 2015, respectively. The 2015 AV hike is due entirely to new construction. Additional building activity will be reflected in the 2016 AV along with potential reassessment gains.

The smaller operating district is comprised primarily of commercial office buildings, accounting for a high 84% of 2015 AV. Nearly all other properties are vacant land parcels which are zoned mixed-use, although many of these parcels are now under construction and will be reclassified in 2016. The operating district is adjacent to the historic Denver Union Station and the new hub of RTD's rail and bus operations.

Tax base concentration remains very high with the top 10 tax payers accounting for 61% and 90% of total AV for the original taxing area and the operating district, respectively. The smaller geographic size of the operating district results in higher tax base concentration that is not expected to diminish even at build-out.

Within the original tax area, top taxpayers are led by Commons 19 LLC, a large apartment and office building owner, accounting for 15% of total AV. The headquarters for DaVita Healthcare Partners comprises 12% of the district's AV. Legacy Plaza, a commercial property, is the second largest taxpayer at 9% and is fully leased as the Gates Rubber Company headquarters. Within the operating district, the largest tax payer (Commons 19 LLC) accounts for 28% of 2015 AV.

HIGH DEBT BUT NO ANTICIPATED FUTURE NEEDS
Overall debt to market value metrics for the original taxing area and the operating district are very high at 11% and 23%, respectively, which are not unusual for a limited purpose special district. Fitch notes that all infrastructure is in place for future development, precluding the need for any future debt. Additionally, the district does not owe developers for any advances or reimbursements, enhancing its operating flexibility.

Aggregate debt service ascends for the next two years and remains level thereafter. Payout is structured very slowly with only 21% of principal retired in 10 years.

ANALYSIS DOES NOT ASSUME FUTURE AV GROWTH
It's the district's goal to maintain or reduce mill rates for debt service for the first several years to provide sum sufficient coverage of higher annual debt service. Such a goal would require continued large AV gains, which Fitch considers aggressive. However, substantial development is currently underway throughout the district.

Properties completed in time for the 2015 collection year include three large residential apartment complexes and two commercial projects. As a result, 2015 AV for the original taxing area and the operating district posted gains of 14.6% and 28%, respectively, over the year prior. Based on projects currently under construction, the district projects another large AV gain in 2016 although preliminary figures are not yet available. Although 2016 is a reassessment year, Fitch believes reappraisal losses are unlikely given the reported results of recent property transactions on which market values are based.

Projecting future tax base and development trends beyond the projects that have been completed is difficult. Fitch's base case assumes AV remains flat at the 2015 level. The total operating district debt service millage rate, to support MADS (in 2030) for the operating and the original district's debt service, would need to increase by a large 38% from the current level of 34 mills to 47 mills. Although this represents a steep increase, it's comparable to past debt service mill levy rates.

The district has no employees and therefore no obligations for pension or other post-employment benefits (OPEB). The debt service fund balance currently totals \\$5.7 million in reserves pledged to the bonds, including a cash-funded debt reserve equal to 50% of average annual debt service, which Fitch considers positively given the district's moderate stage of development.