Moody’s Investors Service has assigned an initial Aa2 rating to Tri-Cities Airport Authority’s $8.5 million Aerospace Park Bonds, Series 2018 (Federally Taxable).
The proceeds will be used to fund construction, site development, infrastructure, paving and utilities for the Aerospace Park project. Proceeds will also be used to pay capitalized interest on the Series 2018 Bonds during construction.
The bonds are secured by the three participating cities’ and two participation counties’ (Bristol, Johnson City, Kingsport; Washington County, and Sullivan County, Tenn.) general obligation pledge base on each’s pro-rata share of the obligation under a guaranty agreement. The bonds are also secured by the Aerospace Park’s net revenue pledge, which is not expected to generate revenues over the near-term. Under the Public Sector Pool Financings methodology, the bonds are rated using the “Weak Link Plus Approach” as the pool is unenhanced with no cross collateralization nor any step up provisions of the members. The bonds do not have a debt service reserve fund.
The Aa2 rating reflects the healthy and stable credit quality of the five city and county participants, all of which have Aa2 general obligation bond ratings.