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Rating Action:

Moody's assigns Aa1 to Clark County (NV) GOLT bonds; outlook is stable

Global Credit Research - 17 Jan 2014

$3.1 billion of rated debt affected

New York, January 17, 2014 --

Moody's Rating

Issue: General Obligation (Limited Tax) Las Vegas Convention and Visitors Authority Bonds (Additionally Secured with Pledged Revenues) Series 2014; Rating: Aa1; Sale Amount: $50,000,000; Expected Sale Date: 1/30/2014; Rating Description: General Obligation Limited Tax

Opinion

Moody's Investors Service has assigned a Aa1 rating to Clark County, Nevada's General Obligation (Limited Tax) Las Vegas Convention and Visitors Authority Bonds (Additionally Secured with Pledged Revenues), Series 2014. At this time, Moody's affirms the Aa1 rating on the county's rated GOLT secured debt outstanding in the amount of $2.7 billion and the Aa2 ratings on lease revenue bonds outstanding in the amount of $349.4 million. The outlook on the county is stable. The current offering is secured by the county's full faith and credit pledge, subject to Nevada's constitutional and statutory limitations on overlapping levy rates for ad valorem taxes. The bonds are additionally secured by net revenues of the Las Vegas Convention and Visitors Authority (LVCVA), which are the expected source of repayment. Proceeds will finance improvements and capital planning for the Las Vegas Convention Center.

SUMMARY RATING RATIONALE

The Aa1 rating primarily reflects the county's favorable long-term credit characteristics that include a still large tax base and local economy concentrated in hospitality and tourism industries. The county's financial position narrowed in the recent recession but remains satisfactory. The rating also reflects the county's notable financial flexibility supported by conservative budgeting practices. Lastly, the county's debt burden remains manageable.

The stable rating outlook primarily reflects Moody's expectation for an uneven recovery in the county's cyclical economy that remains dependent on tourism. The county's tax base remains large compared to most peers and property values have improved significantly in the latest year, though potentially distressed properties may somewhat blunt future improvement. We also expect that the county's financial position will continue to benefit from the management's conservative budgetary practices. Also of note, the county has only moderate debt plans in the near term.

STRENGTHS

- Large service area featuring the City of Las Vegas (Aa2 GOLT/ stable) metro area

- Slow rebound in visitor volumes and related consumer spending benefits cyclical revenues

- Still sizable reserves available to support operations

- Management's willingness to implement significant budgetary adjustments since FY2008

- Most GOLT debt is self-supported by additionally pledged resources from various enterprises

CHALLENGES

- Economy reliant on tourism and related activity

- Exposure to economically sensitive revenues with anticipated modest pace of economic recovery

- Protracted housing market downturn

WHAT COULD MAKE THE RATING GO UP

- Long-term economic diversification that reduces dependence on cyclical consumer driven tourism and construction activities

- Significant appreciation in socioeconomic measures

- Protracted and sustainable strengthening of available reserves

WHAT COULD MAKE THE RATING GO DOWN

- Deterioration of the county's financial position, relative to peers

- Double-barreled GOLT debt no longer self-supported by additionally pledged revenues, resulting in support for debt service that pressures the county's operating performance

- Additional tax base declines to levels inconsistent with similarly-rated peers

The principal methodology used in rating the general obligation debt was US Local Government General Obligation Debt published in January 2014. The principal methodology used in rating the lease revenue debt was The Fundamentals of Credit Analysis for Lease-Backed Municipal Obligations published in December 2011. Please see the Credit Policy page on www.moodys.com for copies of these methodologies.

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.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

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.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Patrick Raymond Liberatore
Analyst
Public Finance Group
Moody's Investors Service, Inc.
One Front Street
Suite 1900
San Francisco, CA 94111
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

William Oh
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 assigns Aa1 to Clark County (NV) GOLT bonds; outlook is stable
No Related Data.

 

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