Summit County, UT Sales Tax Revenue Bond Rating Raised To 'AA' On The Application Of Our Criteria

SAN FRANCISCO (S&P Global Ratings) April 10, 2019--S&P Global Ratings raised its long-term rating to 'AA' from 'AA-' on Summit County, Utah's series 2018 sales tax revenue bonds. The outlook is stable.
"The raised ratings reflect the application of our priority-lien tax revenue debt criteria, published Oct. 22, 2018, on RatingsDirect," said S&P Global Ratings credit analyst Li Yang. "Our criteria factors in both the strength and stability of the county's pledged revenue, as well as the general credit quality of the municipality where taxes are distributed and collected," Mr. Yang added.
The 2018 bond proceeds were used to finance various county transportation projects, which include new roads and road improvements. The 2018 bonds do not have a debt service reserve fund.
Key credit considerations include:
  • The county's adequate-to-strong economic base that is concentrated in the tourism industry;
  • Our view that nationwide sales taxes have historically demonstrated low volatility, and local sales taxes exhibiting a history of low volatility; and
  • The county's additional bonds test (ABT) at 2.0x MADS and dependence on pledged revenue for general operations, which reduces the likelihood that the county will issue additional debt to the fullest extent of the ABT.
Summit County, with an estimated population of 40,486, is located about 10 miles east of Salt Lake City and is primarily an affluent, residential economy.
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