PHOENIX - Lebanon, Ore. is preparing to issue more than $14 million of refunding debt.
The issuance, which is slated for Oct. 13 delivery according to the preliminary official statement, will consist of about $12 million of general obligation refunding bonds and about $2 million of full faith and credit refunding obligations. The bonds carry an A1 rating from Moody's Investors Service and the obligations earned an A2 rating.
Lebanon is a rural municipality of about 16,000 located just east of Interstate 5 between Salem to the north and Eugene to the south. The city's unemployment rate was 6.9% as of June 2015 and "consistently above the state and U.S., likely somewhat driven by the area's rural nature," Moody's said. Median family income 77.3% of the U.S. average as of the 2012 American Community Survey.
"The A1 GOULT rating primarily reflects the city's somewhat modest and rural tax base and relatively low socioeconomic measures, Moody's said. "The city's financial position is modest but expected to improve starting in FY2015 toward reserves and liquidity more aligned with peers. The rating also incorporates the city's high debt burden with only a small portion of non-voted debt supported by operating funds, and a manageable pension burden comparable to peers in Oregon."
"The A2 full faith and credit rating reflects the city's general credit characteristics and the more limited full faith and credit pledge of any of the city's legally available resources," the agency said.
KeyBanc Capital Markets is underwriting the deal, and the firm of Mersereau Shannon is bond counsel.
