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Related Issuers
Succ. Agcy San Juan Capistrano Comm. RDA, CA
Succ. Agcy. to Santee Comm. Dev. Comm., CA
Successor Agcy Santa Monica Red. Agency, CA
Successor Agcy to Menlo Park Com Dev Agcy, CA
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Successor Agency to the Oakland RDA, CA
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Successor Agency to the Riverside Co. RDA, CA
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Rating Action:

Moody's places ratings of CA tax allocation bonds under review for upgrade in conjunction with new methodology

24 Jun 2015

$5.6 billion in debt affected

New York, June 24, 2015 -- Moody's Investors Service has placed under review for possible upgrade the ratings on the tax allocation bonds (TABs) of 45 successor agencies to the former California redevelopment agencies (RDAs). The review is in conjunction with today's publication of a new, updated methodology for rating tax increment debt. In the methodology, Moody's has introduced a scorecard that outlines its approach to rating tax increment debt nationally with special considerations for the unique credit attributes of California tax allocation bonds.

Moody's expects to complete the reviews within 90 days. While the updated methodology applies to tax increment debt nationally, it is leading to reviews of the California tax allocation bonds only. Moody's expects any upgrades resulting from the reviews to be between one and three rating levels or notches.

RATINGS RATIONALE

In the updated methodology, Moody's introduces a scorecard that assigns weights and values to the factors Moody's considers most important in the credit analysis of tax increment debt. The primary factors in this analysis are the characteristics of the project area and the tax base (including size, volatility, socioeconomic and economic diversity), the financial strength of the project area, and the debt provisions and legal structure of the bonds. The scorecard contains both a "Standard Approach" that applies to tax increment debt nationally except for California and a "California TABs Approach" designed to accommodate the unique features of California Tax allocation bonds after the legislative dissolution of the redevelopment agencies in the state in 2012.

For California tax allocation bonds, Moody's includes an important consideration regarding the post-RDA dissolution governing legal structure and framework. Moody's has calibrated the methodology to incorporate the relatively smooth implementation of legislative changes over the last three years, which have led to the timely payment of debt service on California TABs.

"We intend for this methodology to help investors, issuers, and other interested market participants understand how key quantitative and qualitative risk factors are likely to affect ratings in this sector," says Managing Director Naomi Richman.

The methodology updates, replaces and expands nationally the California Tax Allocation Bonds, December 2013 methodology.

This final publication follows a Request for Comment period on the proposed methodology, that was open from 31 December 2014 to 6 March 2015. Market comments led to several adjustments to the methodology's scorecard with the changes reflected in the published version. Certain scorecard factors, weights, and breakpoints were amended and the language in the methodology was expanded and clarified to add transparency around the types of additional considerations that are incorporated into Moody's rating analysis and can lead to scorecard adjustments.

The methodology "Tax Increment Debt" is available on Moodys.com at:

http://www.moodys.com/viewresearchdoc.aspx?docid=PBM_PBM181116

The affected successor agencies are:

Successor Agency to the Alameda County RDA

Successor Agency to the Atwater RDA

Successor Agency to the Azusa RDA

Successor Agency to the Bakersfield RDA

Successor Agency to the Buena Park Community RDA

Successor Agency to the Carson RDA

Successor Agency to the Cathedral City RDA

Successor Agency to the Colton RDA

Successor Agency to the Fontana RDA

Successor Agency to the Fountain Valley Agency for Community Development

Successor Agency to the Glendale RDA

Successor Agency to the Huntington Beach RDA

Successor Agency to the Indian Wells RDA

Successor Agency to the Industry Urban DA

Successor Agency to the La Habra RDA

Successor Agency to the Lompoc Community RDA

Successor Agency to the Los Angeles Community RDA

Successor Agency to the Menlo Park Community Development Agency

Successor Agency to the Oakland RDA

Successor Agency to the Oakley RDA

Successor Agency to the Oceanside CDC

Successor Agency to the Petaluma CDC

Successor Agency to the Pomona RDA

Successor Agency to the Port Hueneme RDA

Successor Agency to the Rancho Mirage RDA

Successor Agency to the Riverside County RDA

Successor Agency to the Roseville RDA

Successor Agency to the San Diego RDA

Successor Agency to the San Francisco RDA

Successor Agency to the San Jose RDA

Successor Agency to the San Juan Capistrano Community RDA

Successor Agency to the San Marcos RDA

Successor Agency to the Santa Ana Comm. RDA

Successor Agency to the Santa Barbara RDA

Successor Agency to the Santa Monica RDA

Successor Agency to the Santa Rosa RDA

Successor Agency to the Santee CDC

Successor Agency to the Soledad RDA

Successor Agency to the Sunnyvale RDA

Successor Agency to the Torrance RDA

Successor Agency to the Union City Community RDA

Successor Agency to the Walnut Creek RDA

Successor Agency to the Watsonville RDA

Successor Agency to the Westminster RDA

Successor Agency to the Whittier RDA

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Tax Increment Debt published in June 2015. 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.

The following information supplements Disclosure 10 ("Information Relating to Conflicts of Interest as required by Paragraph (a)(1)(ii)(J) of SEC Rule 17g-7") in the regulatory disclosures made at the ratings tab on the issuer/entity page on www.moodys.com for each credit rating as indicated:

Moody's was not paid for services other than determining a credit rating in the most recently ended fiscal year by the person(s) that paid Moody's to determine this credit rating.

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.

Robert Azrin
Vice President - Senior 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

Florence Zeman
Associate Managing Director
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 places ratings of CA tax allocation bonds under review for upgrade in conjunction with new methodology
No Related Data.
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