Fitch Rates Mansfield Park Facilities Development Corp.'s (Texas) Sales Tax Revs 'A+'.

AUSTIN, Texas -- Fitch Ratings has assigned an 'A+' rating to the Mansfield Park Facilities Development Corporation, Texas' (the corporation) $2.2 million sales tax revenue bonds, series 2007. Fitch also affirms the 'A+' rating on the corporation's approximately $11.7 million sales tax revenue bonds outstanding.

The bonds are special obligations payable from and secured by a first lien on and pledge of a dedicated 1/2 of 1% sales and use tax levied within the city of Mansfield (the city). Proceeds will be used for various park improvements and land acquisition, acquire a reserve fund surety bond, and pay costs of issuance.

The 'A+ rating reflects a steadily expanding retail sector in the city and corresponding healthy growth in sales tax collections, satisfactory debt service coverage, adequate legal provisions, and solid fiscal policies and financial performance of the city. The rating also considers the high direct and overlapping debt ratios of the city and the potential volatility of sales tax revenues. Corporation projections call for an additional $10 million in debt to be issued through fiscal 2015, which could apply some pressure to coverage levels although satisfactory coverage levels are anticipated though the next eight years.

The corporation is a 4B nonprofit corporation created in 1992 following the passage of a 1/2 of 1% sales tax to promote and provide for economic development within the city. Corporation sales tax receipts growth has been healthy, increasing on average nearly 15% annually since fiscal 2002; preliminary fiscal 2006 results point to another 15% gain over the prior year's collections. Maximum annual debt service (MADS) based on fiscal 2005 pledged revenues is solid 1.8 times (x). Pro forma projections show annual debt service coverage levels ranging from 1.6x to 2.5x through fiscal 2015, assuming reasonable sales tax growth and including additional debt issuances through fiscal 2010.

Legal provisions are adequate with a two-pronged additional bonds test requiring gross revenues received by the corporation during the preceding fiscal year to be 1.35x MADS and 1.5x average annual debt service (AADS). The reserve requirement is the lesser of (i) MADS, (ii) 10% of aggregate proceeds, or (iii) 125% AADS on all parity bonds. The reserve requirement will be met with a surety policy obtained at closing. Principal amortization is about average.

Located in southeastern Tarrant County, the city's estimated 2006 population of more than 54,000 represents an increase of nearly 100% from the 2000 census, and city officials anticipate that its population will reach 70,000 in 2010. Taxable assessed valuation (TAV) growth, which had averaged double-digit percentage gains for most of the last decade, slowed somewhat in fiscal 2007. However, the TAV gain was still respectable at 8.7%--reaching $3.3 billion in value. Including sales tax bonds, direct debt ratios are above average. City finances are strong with undesignated fund balances consistently at or above the policy minimum of 25% of operating expenditures and transfers out. Fitch presently rates the city's general obligation debt 'AA-'.

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