That today's debt service
ratio is at the top of its long run trend makes sense in light of recent trends in productivity growth.
In this scenario Fitch believes that a rate increase would be necessary to meet increased debt service
obligations, as such drains on the general fund would compromise bondholder security and management flexibility by, for example, hampering management's ability to cope with significant or unexpected bridge repair costs.
Additional factors supporting the investment grade ratings include a hybrid use & lease agreement which allows the authority to raise airport rates and charges to meet bondholder covenants thereby lending a degree of stability to airport financials independent of traffic trends; sound coverage of debt service
on senior bonds (1.
SGR bondholders' claim on gross revenues is subordinate only to FGR debt service
deposits, authority administrative costs, and the FGR debt service
reserve fund (DSRF).
Pledged SWRF revenue includes the extra capacity charge, penalties, and interest, and provides sound coverage of debt service
This is an important credit factor since toll revenues need to outpace growing debt service
requirements, which increase in graduated steps.
The underlying 'A' rating reflects the good debt service
coverage provided by pledged state deed recording fee revenues, the availability of significant other revenues that could be used to pay debt service
, if necessary, early pre-funding of debt service
, and the formal involvement of the State of South Carolina (general obligations rated 'AAA' by Fitch).
Credit concerns also include a competitive local gaming environment with four other tribal gaming facilties within 50 miles and reliance upon the successful construction of a hotel and the subsequent boost in gaming activity to achieve an adequate cushion in debt service
These revenues are the primary source of bond security; however, the obligation to pay the debt service
is a general obligation of SUNY and is payable from all legally available sources.
The Rating Watch Negative reflects management's unexpected decision to draw on a portion of total debt service
reserve funds (DSRF) to cover approximately $991,000 of debt service
on outstanding senior airport system revenue bonds and $525,000 of debt service
on outstanding subordinate airport system revenue bonds.