Moody’s Ratings on Tuesday upgraded approximately $900 million in various special tax obligations and Garvey bonds in Florida, in part due to the application of the firm’s new U.S. state and territory rating methodology. It was.
The rating agency upgraded $317.5 million in lottery revenue bonds issued through the Florida Board of Education from Aa3 to Aa1.
Moody’s secured $305.5 million in stamp tax revenue bonds issued by the Florida Department of Environmental Protection for Everglades Restoration and Florida Forever, rated Aa3 to Aa2.
The agency increased $96 million in Seaport Investment Program property fee revenue bonds issued by the Florida Department of Transportation from Aa3 to Aa1.
Moody’s secured $305.5 million in stamp tax revenue bonds issued by the Florida Department of Environmental Protection for Everglades Restoration and Florida Forever, rated Aa3 to Aa2.
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Moody’s upgraded the $172.8 million federal grant prospective revenue bond (Garvies) issued by the Florida Department of Transportation from A1 to Aa3.
The upgrade of Lottery Revenue Bonds to Aa1 was due to the “parental support” of the Florida government, which Moody’s rates as Aaa. This incorporates the narrow nature of the promised lottery revenue that will be transferred to the state’s Educational Enhancement Trust Fund. In 2024, the government is considering raising the annual public debt burden by up to 20 times. Moody’s said additional bond testing was robust.
Moody’s said the Everglades bond’s upgrade to Aa2 incorporates the state’s creditworthiness as a parent support and the narrow and somewhat volatile nature of the stamp duty revenue pledge. The annual public debt service cap for fiscal 2024 has reached 34 times. Bonds have strong additional bond tests.
Everglades bonds have an equal claim on 100% of the stamp duty levy, which is collected on the transfer of real property, bonds, debts evidenced by notes or mortgages.
Moody’s said the upgrade of the Seaport bonds to Aa1 was due in part to the state’s creditworthiness, which it called “parental support” to cushion potential fluctuations in promised revenue. MADS coverage has increased 26 times in fiscal year 2024, but states may authorize additional debt based on promised revenues.
Seaport bonds are paid for from vehicle title fees.
Moody’s said the upgrade of Garvies to Aa3 stems from expectations that promised federal highway and grant debt service coverage will remain strong. “This rating reflects certain credit challenges associated with the Garvey bonds, including the short duration of federal highway funding reauthorization and the potential for bond repayment funding to be interrupted or reduced, as well as strong coverage. and the support of parents.”
Garvey receives construction reimbursement from the Federal Highway Administration to the state Department of Transportation.
The rating has a stable outlook, which “reflects expectations for continued strong fiscal management through the business cycle and administration, including maintaining high levels of reserves and below-median debt.”
The Florida Department of Bond Finance did not respond to requests for comment.
