Rio Nuevo can rest easy knowing its bond rating will remain level this year, even if its future outlook was downgraded slightly.
Fitch, one of the big three national ratings agencies, maintained the district’s $71 million bond offering at an A rating and its $11.8 million bond an A-plus.
The district issued the bonds in 2008 and 2009.
However, the agency did downgrade its outlook for the $11.8 million bond from stable to negative. But that change was tied to the city’s recent dip.
Back in May, Fitch branded the city with a negative outlook mostly due to burgeoning pension obligations. With about $1 billion in unfunded liabilities combined between its four pension programs, Fitch considered those weak funding levels to be a significant factor in its decision.
Rio Nuevo took the ding on it’s bond over concerns with the city’s financial health because repayment of the $11.8 million bond is tied to the city’s lease with the district for the Tucson Convention Center.
As for the $71 million bond, it’s backed by Arizona state sales tax which contributed to its outlook remaining stable.
In its report, Fitch noted the end of hostilities between the city and Rio Nuevo and an uptick in some positive economic indicators–slight increases in housing permits and home prices-as some of the reasons for optimism.
Rio Nuevo Chair Fletcher McCusker said the news is always good when it involves a solid credit rating report.
"We have worked hard to keep Rio Nuevo's credit rating at the A and A plus level", McCusker said in a press release. "We are pleased that Fitch has recognized the improving TIF revenue and acknowledgement of our work to revitalize downtown." Contact reporter Darren DaRonco at 573-4243 or firstname.lastname@example.org.