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Criteria I Governments I U.S. Public Finance: U.S. Local Governments General Obligation Ratings:Methodology <br /> And Assumptions <br /> Table 14 <br /> Assessing The Debt And Contingent Liabilities Score (see paragraphs <br /> Net Direct Debt As% Of Total Governmental Funds Revenue <br /> —otaI GavernmentaI Funds <br /> C,ebt Service As A%of <br /> Total Governmental Funds <y 0 50 to 6G = 'c 12M 120 to 180 x180 <br /> Expenditures <br /> 8 to 15 2 <br /> 15 to 2E 5 <br /> 25 to 35 4 = v 5 <br /> +35 4 5 5 5 5 <br /> A score of 1. 2. 3,4 and 5 are very strong,strong adequate, meak and veryvveak, respectively. <br /> Q ual itative factors with a po sitive i rrp a ct o n the i n it a I Q ual"iive factm vAh a rmgative Wpactanthe <br /> scare: inrlisl wore <br /> Overall net debt as a percentage of market value belokV3%. Significant medium-term debt 0ansproducea higher <br /> initial scare when included. <br /> Overall rapid annualdebt amortization, Wth morethan 65% Exposureto interest-rate risk or instrument provisions <br /> coming due in10 years. that could increase annual payment requirements by at <br /> I east 20%. <br /> Overall net debt as a percentage of market value <br /> exceeding 10%. <br /> Unaddressed exposure to large unfunded pension or <br /> OPEB obligations leading to accelerating payment <br /> abligations over the medium term that represent <br /> significant budget pressure[see paragraph 82}. Ifthere <br /> is plan to address the abligations,the fin aIscore <br /> vaarsens by one point; other4tisethescare%,jxsens by <br /> twYD points. <br /> Speculative contingent liabilities orthose othervise likely <br /> to be funded on an ongoing basis bythe government <br /> representing more than 10% oftotal governmental <br /> revenue. <br /> For each relevant qualitative factor.the scare changes by one point, except for unaddressed expcsureto unfunded <br /> pen sian or 0 P E B abligations-,-hich can %%orsen the final scare by two points.-he final debt anti contingent liabilities scare <br /> equals the initial scare adjusted up ordo,,An based an the net effect afthequalitatiwe factors. lletrics equaI a cute ffpoint <br /> betvveen two initial sea res WlI equate to the vxrse scare. <br /> 79. Qualitative adjustments may raise or lower the final debt and contingent liabilities score relative to the initial score, as <br /> shown in table 14.The criteria consider pending debt issuance through an upward score adjustment when including <br /> WWW.STANDARDANDPOORS.COM/RATINGSDIRECT SEPTEMBER 12,2013 29 <br /> 1190266 1300881696 <br />