Fitch Ratings reaffirmed its rating of BBB+ on about $5 million worth of tax allocation bonds issued in 2004 by the Orange Cove Redevelopment Agency. Fitch also revised the rating outlook for the bonds from stable to positive.
A BBB rating indicates "that expectations of default risk are currently low," according to the New York-based bond- and credit-rating firm. "The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity."
The upward revision in the outlook is based on improvement in the city's surplus housing revenue that is available to pay for debt service on the bonds as well as recent stabilization and gains in assessed values of property in the area.
Fitch analysts noted that assessed values rose in this fiscal year have increased by 3.8%, compared to relatively flat growth of 0.5% in 2012-13 and a decline of 1.7% in 2011-12.