Fitch awards its highest rating to Indianapolis Community Justice bonds
_National ratings service assigns a “AAA” rating to bonds that will fund new Community Justice Campus in the Twin Aire neighborhood _
INDIANAPOLIS – Fitch Ratings Service (Fitch) awarded its highest rating – “AAA” – to the Indianapolis Public Improvement Bond Bank’s two Community Justice Campus (CJC) bonds. Rarely, if ever, has Fitch awarded a ‘AAA’ rating to a lease abatement financing of this kind in Indiana. The series 2019A and 2019B bonds total more than $623 million and will fund the new consolidated adult detention facility and courthouse, as well as an assessment and intervention center being built on the 140-acre site formerly occupied by the Citizens Energy Group Coke Plant in the Twin Aire neighborhood.
“We worked diligently to assess and ensure the affordability of this project – without a tax increase,” said Mayor Joe Hogsett. “The ‘AAA’ rating represents the fiscally conservative and taxpayer-first mentality of our team, potentially resulting in millions of dollars in interest savings.”
Series 2019A, valued at approximately $610.5 million, will fund the consolidated county jail that replaces existing correctional facilities, as well as a consolidated county courthouse that joins civil, criminal, juvenile and probate courts into one building. Series 2019B, valued at approximately $12.6 million, will fund an assessment and intervention center to provide temporary shelter, case assessment and treatment referral services to individuals suffering from addiction or mental illness. The 2019A bonds are backed by a pledge of local income tax revenues, while the 2019B bonds are backed by a pledge of property taxes.
Fitch explains its ‘AAA’ rating on the 2019A bonds reflect anticipated income tax revenue growth based on the city’s expanding local economy, grounded in positive trends in population growth, employment and personal income. Fitch cited a 6% cumulative increase in taxable assessed values in 2018 and 2019, due in large part to a boom in residential and commercial development. Fitch also noted that the city’s unemployment rate has been trending below the national rate since 2015, likely attributed to the swift expansion of the technology sector in Marion County. The ‘AAA’ rating on the 2019B bonds reflects the city’s strong underlying credit strength.
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