The Point: In a vote of confidence in RCTC’s financial stewardship and responsibility, Fitch Ratings assigned an ‘AA’ rating and S&P Global Ratings (S&P) assigned a ‘AA+’ to RCTC’s long-term sales tax revenue bonds.
As RCTC prepares to issue refunding bonds on all of its 2010 Series A Sales Tax Revenue Bonds (2010A Bonds) and a portion of the 2013 Series A Sales Tax Revenue Bonds (2013A Bonds), totaling approximately $410 million, two of the nation’s most respected credit ratings agencies reaffirmed RCTC’s strong finances.
On December 12, Fitch Ratings assigned a ‘AA’ rating and S&P assigned a ‘AA+’ to RCTC’s long-term sales tax revenue bonds.
These credit ratings allow RCTC to refinance its current debt with lower interest rates that will save Riverside County taxpayers millions of dollars over the next two decades. Preliminary analysis by RCTC’s financial team indicate RCTC may be able to achieve cash flow savings of up to $49 million through 2039 if the sales tax bonds are successfully refunded this month.
“With less Measure A revenue used for interest payments, more is available to invest in our infrastructure,” said RCTC Chief Financial Officer Theresia Trevino, “We are being proactive in finding opportunities to decrease costs and deliver more for taxpayers.”
Credit ratings provide individual and institutional investors with information to help them determine the likelihood that issuers of debt obligations and fixed-income securities will be able to meet their financial obligations (in this case, RCTC). In issuing and maintaining credit ratings, credit rating agencies rely mostly on objective factual information to insure credibility.
At its December 13 meeting, the RCTC Commission unanimously voted to pursue refunding its sales tax debt immediately in anticipation that the federal Tax Cuts and Jobs Act proposed by Congress will eliminate the tax-exempt status of advance refunding bonds issued by government agencies such as RCTC. At the same meeting, the Commission also unanimously voted to recommend Congress strike this provision from the Tax Cuts and Jobs Act.
RCTC’s refunding bonds are expected to price via negotiation with banks on or around December 19.
RCTC maintains a steadfast commitment to being a responsible steward of Riverside County taxpayers’ dollars. The agency’s track record is reflected by these positive credit ratings.