Moody's Investors Service has assigned an Aa2 to the City of Lawrenceville, GA's General Obligation (GO)-backed $14.5 million Revenue Bonds (City of Lawrenceville Project), Series 2023, that are being issued through the Lawrenceville Building Authority, GA. Moody's maintains an Aa2 issuer rating on the city and an Aa2 rating on the authority's outstanding revenue bonds backed by the city. Following the sale, the authority will have approximately $76 million of city-backed revenue debt outstanding.
RATINGS RATIONALE
The Aa2 issuer rating reflects the city's expanding economy and steady population growth, which are driving revenues and supporting the city's solid financial position. The city's long-term liabilities ratio and fixed-costs ratio, when including off-balance sheet debt obligations, are also in line with the rating category and expected to remain so, as a bulk of the city's future capital needs are expected to be funded with dedicated revenues.
The Aa2 rating on the revenue bonds is placed at the same level as the issuer rating because the city has pledged, via an intergovernmental contract, its full faith and credit and unlimited taxing power for repayment of the bonds. The bonds are backed solely by payments made by the city, and the city has covenanted to levy and collect taxes (unlimited by rate or amount) in an amount sufficient to pay for debt service on the bonds.
RATING OUTLOOK
Outlooks are not typically assigned to cities with this amount of debt outstanding.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
- Continued economic growth that bolsters resident income and/or full value per capita
- Trend of surplus operations and maintenance of strong reserves
- Moderation of long-term liabilities ratio, including off-balance sheet debt
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
- Material decline in reserves due to operating deficit or one-time uses
- Material Increase long-term liabilities ratio or fixed costs ratio
LEGAL SECURITY
The revenue bonds are special limited obligations of the authority, payable solely from installment payments made by the city in an amount sufficient to pay debt service. Pursuant to an Agreement of Sale, the city has agreed to levy an annual ad valorem tax on all taxable property located within the city at such rates, without limitation, as may be necessary to make such installment payments. The city's obligation to make such payments is absolute and unconditional.
PROFILE
The City of Lawrenceville is located in Gwinnett County (Aaa stable) in north central Georgia, approximately 25 miles northeast of Atlanta. The city provides general governmental services like public safety and works and several business-type activities that include natural gas distribution, electric distribution, and stormwater.
USE OF PROCEEDS
The Series 2023 bonds will finance various city electric and gas utility improvements.
METHODOLOGY
The principal methodology used in these ratings was the US Cities and Counties Methodology published in November 2022 and available at https://ratings.moodys.com/rmc-documents/386953. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at https://ratings.moodys.com/rating-definitions.
For ratings issued on a program, series, category/class of debt, or security, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security, or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information, please see the issuer/deal page for the respective issuer on https://ratings.moodys.com.
The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.
This rating is solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings, available on its website https://ratings.moodys.com.
Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.
Moody's general principles for assessing environmental, social, and governance (ESG) risks in our credit analysis can be found at https://ratings.moodys.com/documents/PBC_1355824.
The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and Moody's office that issued the credit rating is available at https://ratings.moodys.com.
The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and Moody's office issuing the credit rating is available at https://ratings.moodys.com.
The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and Moody's office that issued the credit rating is available on https://ratings.moodys.com.
Please see https://ratings.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.
Please see the issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each credit rating.
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