Standard & Poor’s recently confirmed Seal Beach’s “A” credit rating.
“Standard & Poor’s Ratings Services affirmed its ‘A’ long-term rating on Seal Beach Public Financing Authority, Calif.’s outstanding refunding revenue bonds. The outlook is stable,” said the company in a recent report.
A is the third-highest rating the service provides.
“The stable outlook reflects our expectation that the district will not dilute coverage with additional bonds. Due to the currently strong coverage and relatively soon maturity, we do not anticipate changing the rating during the two-year horizon of the outlook,” said the Nov. 12 report from Standard & Poor’s.
The A rating means Seal Beach has a “strong capacity to meet financial commitments but somewhat susceptible to adverse economic conditions and changes in circumstances,” said the Standard & Poor’s website.
Victoria Beatley, Seal Beach director of Finance, said the A rating means that Standard & Poor’s is comfortable with the city’s debt and management.
Beatley said that the A rating would help keep interest low if the city were to issue bonds in the future.
“It’s also an external look at city finances,” Beatley said.
She said the report should reassure citizens that the city is doing well financially.
According to Standard & Poor’s, the A rating reflects their view that the Seal Beach Public Financing Authority has a “very small, but wealthy and fully developed, residential district,” and a “fully cash-funded debt service reserve fund.”
The ratings service also said Seal Beach has been repaying its debt rapidly. The final debt matures in 2015.
According to Standard & Poor’s, Seal Beach’s bonds are secured by reassessments levied against property in Surfside Colony. S&P put the assessed value of the Surfside Colony properties at $165 million. “As of the December 2012 disclosure, there were no delinquent assessments within the district. We consider the tax rate to be relatively high at 2.0 percent,” the report said.
“Residents in the city enjoy high income and low unemployment levels, with median household and per capita effective buying income at 106 percent and 167 percent, respectively, of the national level,” the report said.
“The city’s preliminary unemployment rate was 4.5 percent in June 2013,” the report said.
