Return to Stable: Fitch Ratings Affirms Orange County’s TDT Revenue Bonds
Following a routine annual credit rating surveillance process, Fitch Ratings (one of the “Big Four” credit rating agencies along with Moody’s, Kroll and Standard & Poor’s) has published a Rating Action Commentary affirming the Orange County Tourist Development Tax (TDT) revenue bonds’ “AA” rating and returning the outlook to “stable.”
“This outlook upgrade is a testament to the COVID-19 safety measures our County and regional business leaders swiftly put in place, not only to protect our residents but ensured Orange County was and is a safe place for travelers to visit,” said Orange County Mayor Jerry L. Demings. “We are reaping the reward for making smart, safe and fiscally conservative decisions that allowed us to weather the COVID-19 crisis.”
In April 2020, as the pandemic unfolded and TDT collections were severely impacted, Fitch affirmed the Orange County TDT “AA” rating but added a cautionary “rating watch negative” outlook to alert clients that the County’s TDT was facing negative forces that could impact the rating in the future. During the pandemic, the region’s unemployment rate peaked at 22.6 percent, and flights to the metro area plummeted by 97 percent.
Today, however, the County has rebounded, with unemployment estimated at 5.6 percent and Orlando International Airport back to being one of the top five busiest airports in the nation. By rethinking budget priorities, Orange County Government is maintaining long-term financial health, and Fitch’s expectations are for steadily improved revenue performance over the course of 2022.
“Backed by our local tourism economy, the County has once again weathered a tourism downturn as happened after the 2001 terror attacks and the 2008-2009 Great Recession,” said Fred Winterkamp, Orange County Fiscal & Business Services Division Manager. “The return to a stable outlook from Fitch isn’t a rating change, but it is another sign of a return to health in the County’s tourism economy.”
For the Fitch credit rating surveillance process, County staff from Fiscal & Business Services, Orange County Convention Center and the County Attorney’s Office were assisted by outside support from the Orange County Comptroller staff, the financial advisory firm of PFM Financial Advisors LLC, and bond counsel provided by Greenberg Traurig.
For more information about Fitch Ratings Rating Action Commentary, go to Fitch Ratings.