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Seattle Museum Development Authority, WA — Moody’s assigns Aaa to City of Seattle, WA’s LTGO Bonds, 2020A and 2020B (taxable); outlook stable – Yahoo Finance

Rating Action: Moody’s assigns Aaa to City of Seattle, WA’s LTGO Bonds, 2020A and 2020B (taxable); outlook stable

Global Credit Research – 29 Jul 2020

New York, July 29, 2020 — Moody’s Investors Service has assigned Aaa ratings to the City of Seattle, Washington’s $79.1 million Limited Tax General Obligation Improvement and Refunding Bonds, 2020A and $11.4 million Limited Tax General Obligation Improvement Bonds, 2020B (Taxable). Concurrently, Moody’s has affirmed the Aaa ratings on the city’s $262.8 million in general obligation unlimited tax bonds, as well as the Aaa ratings on the city’s $627.4 million in general obligation limited tax bonds. The rating outlook is stable.

RATINGS RATIONALE

The Aaa ratings reflect the city’s large tax base that forms the economic center of the State of Washington (Aaa stable) and the region includes some of the world’s most well-known international corporations, including Amazon, Microsoft and Boeing. Although the coronavirus pandemic is having a significant impact on general economic conditions, particularly for the aerospace and leisure and hospitality sectors, we expect strong underlying fundamentals will help to mitigate some of these challenges. High property values are driven by socioeconomic measures that are amongst the strongest in the country for a large city, though we anticipate some softening as the coronavirus pandemic wears on. The city’s financial profile, which has historically been characterized by healthy reserve levels and liquidity, will experience some weakness in the near-term as substantial declines in revenue are anticipated as a result of the coronavirus. The ratings also incorporate a very strong management team with prudent institutionalized financial practices. The city’s debt profile is manageable, consisting entirely of fixed-rate obligations, and pension and OPEB liabilities are moderate.

The absence of a rating distinction between the city’s unlimited tax general obligation and limited tax general obligation ratings reflects the strength and broadness of the full faith and credit pledge in Washington, which Moody’s rates at the same level as an unlimited tax general obligation pledge.

RATING OUTLOOK

The stable outlook reflects our expectation that the city’s currently strong financial profile will provide some cushion from the effects of the coronavirus. While we expect elevated levels of unemployment and depressed levels of spending to result in lower overall tax revenue for the city, we also expect that the city’s management team will find ways to address projected revenue shortfalls in ways that allow the city to maintain an overall healthy financial profile.

FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS

– Material weakening in the city’s finances

– Prolonged deterioration in the economy and tax base

– Substantial growth in debt and/or pension liabilities

LEGAL SECURITY

The limited tax general obligation bonds are secured by the city’s full faith, credit, and resources and pledge to levy taxes annually within the constitutional and statutory tax limitation provided by law without a vote of the people.

USE OF PROCEEDS

The 2020A bonds will be used to pay for various elements of the city’s capital improvement program as well as refinance for savings certain outstanding obligations of the city.

The 2020B bonds will be used to pay for various elements of the city’s capital improvement program as well as make funds available to its affordable rental housing program.

PROFILE

Seattle is the economic center for the Pacific Northwest. The city is a full-service city, with a relatively affluent population of nearly 747,300, a large and well-educated labor force, and ties to the broader metropolitan area including the cities of Bellevue and Everett.

METHODOLOGY

The principal methodology used in these ratings was US Local Government General Obligation Debt published in September 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1191097. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For further specification of Moody’s key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody’s Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider’s credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The ratings have been disclosed to the rated entity or its designated agent(s) and ssued with no amendment resulting from that disclosure.

These ratings are solicited. Please refer to Moody’s Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Moody’s general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.

The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s affiliates outside the EU and is endorsed by Moody’s Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody’s office that issued the credit rating is available on www.moodys.com.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody’s legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

William Oh Lead Analyst Regional PFG West Moody's Investors Service, Inc. One Front Street Suite 1900 San Francisco 94111 US JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 John Nichols Additional Contact Regional PFG Dallas JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653

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