Metro, OR $200 Million GO Bonds Assigned 'AAA' Rating On Very Strong Reserves, Flexibility To Adjust Expenditures

CENTENNIAL (S&P Global Ratings) March 26, 2020--S&P Global Ratings assigned its 'AAA' long-term rating to Metro, Ore.'s estimated $110 million series 2020A general obligation (GO) bonds and estimated $90 million series 2020B GO bonds. S&P Global Ratings also affirmed its 'AAA' long-term rating on Metro's existing GO bonds and full faith and credit obligations. The outlook on all ratings is stable.
Metro's credit profile benefits from the long-term expansion of the broad and diverse economic base across its three-county territory. In the near term, we expect a significant slowing of market value growth, and we anticipate other economic metrics will likely be pressured given the emerging macroeconomic downturn related to COVID-19.
"The rating reflects our view of Metro's very strong reserves and consistent track record of receiving voter support for both its fund services and projects, which will support credit quality over the two-year outlook period," said S&P Global Ratings credit analyst Andrew Bredeson. "We believe Metro has the flexibility to adjust its expenditures, such as those related to regional planning and development, and we anticipate this will help it maintain its fund balances as certain revenue streams may be pinched," Mr. Bredeson added.
Metro plans to apply proceeds from its series 2020 bonds to fund projects to protect clean water and natural areas, and improve access to parks and natural areas within its district. Metro received authorization from its voters in November 2019 to issue up to $475 million in GO bonds to fund projects in these areas. Post-issuance, Metro will have about $275 million in remaining voter-approved GO borrowing capacity.
Encompassing approximately 1.9 million residents in the urban portions of Clackamas, Multnomah, and Washington counties, Metro is a regional government that serves the bulk of the Portland region within Oregon.
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