Coyote Canyon Community Facilities District No. 2004-1, CA Bond Rating Raised To 'A-' On Updated Methodology

CENTENNIAL (S&P Global Ratings) April 2, 2019--S&P Global Ratings raised its 
underlying rating (SPUR) to 'A-' from 'BBB+' on Coyote Canyon Community 
Facilities District (CFD) No. 2004-1, Calif.'s special tax bonds. The outlook 
is stable.

The rating reflects the application of our updated methodology, titled "Special
Assessment Debt," published April 2, 2018, on RatingsDirect. 

"The stable outlook reflects our expectation that the economy will remain 
robust given its access to a broad and diverse metropolitan statistical area, 
very strong incomes, and low unemployment rate," said S&P Global Ratings 
credit analyst Angel Bacio. "We anticipate delinquencies in the district will 
remain low."

Proceeds of the series 2016 A bonds will be used to refund all of the CFD's 
outstanding 2009A special tax bonds, and proceeds of the series 2016 B bonds 
will be used to crossover refund the district's outstanding series 2009B 
special tax bonds for interest cost savings. The series A bonds are secured by 
net taxes collected within Improvement Area No. 2. Prior to the crossover date 
of Sept. 1, 2019, the series B special tax refunding bonds will be secured by 
proceeds deposited into an escrow fund. We understand the proceeds in the 
escrow fund will be invested in noncallable federal securities. On and after 
the crossover date, net taxes collected within Improvement Area No. 2 will 
secure the series B bonds. For that reason, the rating on the series B bonds 
reflects the weaker of the CFD's long-term rating and the U.S. government 
sovereign rating until the crossover date. Afterward, the rating will reflect 
only the district's long-term rating

Revenue from special taxes collected from parcels within the district secure 
the bonds. The bonds require a reserve funded at a level equal to the least of 
100% of maximum annual debt service (MADS), 125% of average annual debt 
service, or 10% of the original par. The lien is closed, except for refunding 
purposes.

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