Fitch Affirms Florida Seaport Revs at 'AA'; Outlook Stable
--$129.8 million Seaport Investment Program revenue bonds, series 2013.
The Rating Outlook is Stable.
First lien on the annual allocation to the Seaport Investment program, which consists of the first $10 million of certain MV title fees annually appropriated and deposited into the State Transportation Trust Fund (STTF).
KEY RATING DRIVERS
FIXED APPROPRIATION FOR DEBT SERVICE: The bonds are secured by a statutorily dedicated, annually appropriated fixed dollar payment from certain motor vehicle title tax revenue deposited into the STTF.
AMPLE DEBT SERVICE COVERAGE: Debt service is limited to the current maximum appropriation of $10 million, which is amply covered by the $200 million of title fees transferred into the TTF.
LIMITS ON ADDITIONAL BORROWING: A satisfactory additional bonds test would require 1.5x coverage from certain historical motor vehicle title fees. A change in statute would be required to increase appropriation for additional debt in excess of the $10 million current allocation for annual debt service.
The rating is sensitive to performance of the pledged revenues.
The rating reflects the strength of the pledged primary revenue stream -- a fixed allocation of certain motor vehicle title fee revenues that are transferred by annual legislative appropriation to the state transportation trust fund. The state will annually appropriate to the Seaport Investment Program the first $10 million derived from the $47 portion of title fees on motor vehicles that are deposited into the STTF.
The Florida Department of Highway Safety and Motor Vehicles (DMV) collects title fees upon the issuance of each original or duplicate certificate of title on all motor vehicles operated on the roads of the state. The current fee is $70 for each certificate of title, of which $47 is deposited in the STTF up to a maximum of $200 million in any fiscal year.
Pledged revenues provide ample coverage of the $8.6 million in annual debt service that was structured within the $10 million annual allocation. The $47 portion of the transaction fee generated $227 million in fiscal 2015, of which the maximum $200 million was transferred to the TTF. MV Title transactions have rebounded from the lows reached during the recession, growing 6.1% in fiscal 2015.
SOLID LEGAL PROVISIONS
The state does not anticipate issuing additional bonds against the revenue stream. In addition, there is an additional bonds test (ABT) that requires the $47 portion of title fees in the prior year provide 1.5x coverage of maximum annual debt service (MADS).
The bonds were issued by the Florida Department of Transportation (FDOT) to finance improvements at several ports located throughout the state.