Downtown Convention Hotel Bond Receives ‘A’ Rating from Standard & Poor’s

From the office of Evansville Mayor Lloyd Winnecke

A new report by Standard & Poor’s has reaffirmed its ‘A’ rating on lease rental bonds issued by the City of Evansville Redevelopment Authority to finance the Ford Center. S&P also assigned an ‘A’ rating on economic development revenue bonds for the downtown convention hotel project. The ‘A’ rating means the City has a “strong capacity” to meet its obligations to repay the debt and is among S&P’s highest rating categories.

“The rating reflects the strength of the City’s county option income tax (COIT) pledge” to pay off the bonds, according to a Standard & Poor’s report issued Monday, August 10, 2015. The report indicated the COIT pledge and revenues from the local food and beverage tax would provide good coverage for the annual debt service on the bonds. Other positive factors were “a large and diverse employment and income tax base serving as a regional economic center” and “declining unemployment.” The June 2015 unemployment rate for Vanderburgh County was 4.3 percent, according to the U.S. Bureau of Labor Statistics.

The City intends to use proceeds from the bonds to finance its portion of renovation projects related to the downtown convention hotel and convention center, including infrastructure and landscape improvements. The rest of the project will be privately financed.

S&P expects the outlook for COIT and food and beverage revenues to remain stable in the future. “In our opinion, the economy is showing strong recovery, marked by consistently declining unemployment and new developments,” the report states. “Supporting our outlook on the revenue stream is the area’s strong economy, which has a diverse tax and employment base pulling from a large area.”