Louisiana Local Government Environmental Facilities Community Development Authority 2015 Bond Rating Lowered To 'A+'


CENTENNIAL (S&P Global Ratings) March 12, 2019--S&P Global Ratings lowered its 
rating to 'A+' from 'AA-' on Louisiana Local Government Environmental 
Facilities Community Development Authority's series 2015 revenue bonds, issued 
for Ragin’ Cajun Facilities Corp. (Cajundome Project), based on the 
application of its "Priority-Lien Tax Revenue Debt" criteria, published Oct. 
22, 2018. The outlook is stable.

"The downgrade is due to our assessment of the volatility of hotel taxes, as 
well as a trend of declining hotel tax revenues over the past two years," said 
S&P Global Ratings credit analyst Alex Louie. While local economy metrics 
continue to show steady growth, hotel tax revenues continue to decrease. 
Officials believe that 2019 will show an improvement in pledged revenues 
compared to 2018, due to new hotel properties and an increase in average daily 
rate as well as occupancy. However, the gradual decline of pledged revenues is 
a credit weakness at this time.

The bonds are secured by a first lien on revenue generated by a 3.97% hotel 
occupancy tax collected in Lafayette Parish by the State Department of Revenue 
and paid by the state treasury to the trustee by state appropriation. The 
hotel occupancy tax was originally authorized in 1997 and operates in 
perpetuity. A debt service reserve funded at the least of maximum annual debt 
service, 125% average annual debt service, or 10% of par provides liquidity 
for debt service on these issuances and all existing parity bonds. Per state 
legislation, after a transfer of $200,000 to the Lafayette Visitors and 
Convention Bureau, excess revenue can be used on capital projects to benefit 
the Cajundome.
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