McAllen – There are more positive economic indicators for the City of McAllen. City leaders were just notified that the McAllen Development Corporation (MDC) received an ‘AAA’ credit rating assigned by Standard and Poor’s Global Ratings for the sales tax revenue bonds dated July 1, 2016. The bond will be used for initial payment of the parking garage at La Plaza Mall. That is the highest possible credit rating a city can receive.
“This is a strong signal that the project is well planned and well financed,” said City Manager Roel “Roy” Rodriguez, P.E.
The outlook is stable and reflects S&P Global Ratings' opinion that it will likely not change the rating over the two-year outlook period.
“The AAA rating reflects MDC’s and McAllen’s sound fiscal management and the city’s substantial and diverse tax base strengthened by a solid government, sound retail sales, and our health care and higher education sectors,” Mayor Jim Darling said. “These top credit ratings are a testament to the strong fiscal management we have implemented to make sure our city is strong now and in the long term.”
The ‘AAA’ rating reflects S&P’s opinion of:
- MDC’s very strong 38.6x coverage of the maximum annual debt service (MADS) requirement, supported by steady growth in pledged revenue
- The City of McAllen’s role as a regional economic center in the Rio Grande Valley, resulting in very strong per capita retail sales; and
- Strong 2.25x additional bonds test (ABT)
S&P views McAllen’s per capital retail sales of 223% of the national level as very strong due to international trade. The local economy has close ties to U.S.-Mexican trade, which has played a significant role in fueling McAllen's growth and diversification over the past 15 years.
The group also cited McAllen's low cost of doing business, geographical advantages that benefit from binational trade with Mexico, and access to an increasingly skilled labor force will likely continue to contribute to a stable economic base.