City of Austin, TX – Special Tax (Convention Center) Rating Report

Rating Summary

The ratings for the Special Tax Revenue Bonds (Convention Center Project) (the Bonds) reflect the established collection history and growing trend of pledged hotel occupancy tax receipts as well as the exceptionally strong socioeconomic characteristics of the underlying Austin area economy. These strengths are balanced by the sensitivity of pledged receipts to the economic cycle and events that disrupt travel. The rating for Senior Bonds incorporates the strong security provisions including a 1.50x additional bonds test (ABT) while the rating for the Junior Bonds reflects their subordinate priority of payment and comparatively weak security provisions that include a 1.00x ABT.

Proceeds from the currently offered Senior Bonds and Junior Bonds (the Bonds) will be used to: finance the demolition, construction, reconstruction and expansion of the City’s Convention Center; fund required debt service reserves; and, pay the costs of issuance.

The Bonds are a special obligation…