LOS ANGELES — Moody's Investors Service affirmed Clark County, Nevada's Aa1 rating ahead of plans to price $100 million in general obligation limited tax flood control bonds on Nov. 20.
Bond proceeds will be used to fund the acquisition, construction, improvement and extension of flood control infrastructure projects.
Moody's Nov. 10 affirmation applies to the Aa1 rating on $2.6 billion in outstanding GOLT bonds and the Aa2 rating on $183 million of the county's lease revenue bonds. The outlooks are stable.
The new 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 an irrevocable lien on all revenue derived by the county from a 0.25% sales tax on retail sales and personal consumption.
Clark County incorporates Las Vegas, and Moody's analysts cited the county's large tax base and economy rooted in tourism and gambling, as well as satisfactory financial operations that have stabilized and healthy reserve levels despite years of structural imbalance. The rating also takes into account a manageable debt burden that features a substantial portion of self-supporting debt, as well as high pension liabilities, Moody's said.
The insignificance of the lease burden relative to the county's overall budget and the county's general credit characteristics were cited in the lease revenue bond rating.
The stable outlook was a reflection of Moody's expectation "that the county's tax base will continue to improve along with a slowly recovering tourism and gaming-dependent economy, and that the county's financial position will continue to benefit from the county's strong management team and conservative budgeting practices," analysts said.
The large service area encompassing the Las Vegas metro area also was deemed a strength.
Long-term economic diversification that reduces dependence on tourism and gambling, significant improvement in socioeconomic measures and protracted sustainable strengthening of available reserves could bump the rating up.
Deterioration of the county's financial position and tax base declines relative to its peers could cause the rating to fall.
If the double-barreled GOLT debt was no longer supported by additionally pledged revenues, pressuring the county's operating performance that could also result in downward pressure on the rating, Moody's analysts said.
