At least for $46MM of the proposed $100,000,000 General Obligation Debt Bonds - even before we know the results of tomorrow's election
Fitch Assigns Initial 'AA' IDR to Mesa, AZ; Rates $46MM GO Bonds 'AAA'
Thu 29 Oct, 2020 - 10:34 ET
Fitch Ratings - Austin - 29 Oct 2020: Fitch Ratings has assigned an initial 'AAA' to the following general obligation (GO) bonds of the city of Mesa, Arizona:
--$22.1 million general obligation bonds, series 2020;
--$24.1 million general obligation refunding bonds, series 2020.
Both series of bonds will be sold via negotiation the week of Nov. 9. Series 2020 new money proceeds will finance parks, public safety and streets improvements, while the series 2020 refunding proceeds will refinance a portion of the city's outstanding tax-supported debt for interest savings.
Fitch has also assigned an Issuer Default Rating of 'AA' to the city. . .
SECURITY
Both series of bonds are payable from an unlimited ad valorem tax levied against all taxable property in the city.
The Arizona legislature in its 2016 and 2017 sessions (52nd and 53rd legislatures) approved amendments to various sections of the Arizona Revised Statutes that provide ULTGO bondholders with a statutory lien on ad valorem taxes of cities, towns, counties, school districts, community college districts and various special districts in the state. Fitch believes the statute provides bondholders with a substantial preferential right in a bankruptcy proceeding, warranting a GO bond rating up to two notches higher than the entity's IDR. The statutory lien applies only to ad valorem tax revenues and applies both to GO bonds previously issued and to be issued in the future. The legislation does not affect Fitch's IDR for the city.
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