Affirms Aa3 General Obligation rating on roughly $9.4 million of outstanding debt
New York, December 18, 2012 --
Moody's Investors Service has revised the outlook on the Borough of Belmar
(NJ) to negative in the aftermath of Hurricane Sandy. Moody's
affirms the Aa3 rating on roughly $9.4 million of outstanding
general obligation debt, secured by the borough's unlimited
property tax pledge.
SUMMARY RATINGS RATIONALE
The Aa3 rating reflects stable, adequate reserves, conservative
budgeting, a moderately sized tax base with solid wealth levels,
and a manageable debt burden.
The negative outlook reflects the risks the borough faces in the aftermath
of Hurricane Sandy, including potential reduction to assessed value,
the increase in debt burden from an expected bond sale to pay for boardwalk
reconstruction and other clean-up costs, and the susceptibility
of the budget to sensitive tourism-related revenues.
STRENGTHS
-- Solid wealth levels
-- Stable financial profile
CHALLENGES
-Declining fund balance
-Some reliance on seasonal revenues
-Roll-over risk posed by short-term notes
Outlook
The negative outlook reflects the risks the borough faces over the next
one to three years, including probably reductions to assessed value,
the increase in debt burden from an approved bond ordinance, and
the performance of seasonal, tourism-related revenues.
WHAT COULD MAKE THE RATING GO UP
- Sustained build-up in reserves
-Strengthening of tax base
WHAT COULD MAKE THE RATING GO DOWN
-Depletion of reserves
-Structural imbalance to budget
-Failed market access for short-term debt
The principal methodology used in this rating was General Obligation Bonds
Issued by U.S. Local Governments published in October 2009.
Please see the Credit Policy page on www.moodys.com for
a copy of this methodology.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
Please see the credit ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Please see the ratings disclosure page on www.moodys.com
for general disclosure on potential conflicts of interests.
Please see the ratings disclosure page on www.moodys.com
for information on (A) MCO's major shareholders (above 5%) and
for (B) further information regarding certain affiliations that may exist
between directors of MCO and rated entities as well as (C) the names of
entities that hold ratings from MIS that have also publicly reported to
the SEC an ownership interest in MCO of more than 5%. A
member of the board of directors of this rated entity may also be a member
of the board of directors of a shareholder of Moody's Corporation;
however, Moody's has not independently verified this matter.
Please see Moody's Rating Symbols and Definitions on the Rating Process
page on www.moodys.com for further information on the meaning
of each rating category and the definition of default and recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com
for the last rating action and the rating history.
The date on which some ratings were first released goes back to a time
before Moody's ratings were fully digitized and accurate data may not
be available. Consequently, Moody's provides a date that
it believes is the most reliable and accurate based on the information
that is available to it. Please see the ratings disclosure page
on our website www.moodys.com for further information.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Dan Seymour
Associate Analyst
Public Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Julie Beglin
Vice President - Senior Analyst
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's revises the outlook on the Borough of Belmar (NJ) to negative in the aftermath of Hurricane Sandy