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Manhattan Beach, CA’s Series 2018 Reassessment District No. 2018 Limited-Obligation Refunding Bonds Assigned ‘A’ Rating

          CENTENNIAL (S&P Global Ratings) Jan. 17, 2018--S&P Global Ratings assigned its 'A' long-term rating to the City of Manhattan Beach, Calif.'s Reassessment District No. 2018 limited-obligation refunding bonds, series 2018. The outlook is stable. 
          "The rating reflects our view of the district's very strong direct and overlapping value-to-lien ratio of 69 to 1; very diverse and mostly residential tax base; strong economy in Manhattan Beach, further supported by low unemployment and very strong incomes; and low overall taxpayer delinquencies," said S&P Global Ratings credit analyst Michael Parker. 
          Partly offsetting the above strengths, in our view, is the district's inability to increase its annual assessment rates to cover taxpayer delinquencies. Per-parcel annual assessments are fixed and are projected to be sufficient to cover debt service by 1x. 
          The stable outlook reflects our view of the district's historically low delinquency rates and very strong overall value-to-lien (VTL) ratios. The outlook also reflects the district's essentially built-out status of development and primarily residential tax base. In addition, the outlook reflects the very strong incomes in Manhattan Beach, suggesting the tax base will continue to provide adequate coverage to support debt service. We do not expect to change the rating within the two-year outlook horizon. 
          The stable outlook reflects our view of the district's historically low delinquency rates and very strong VTL ratios. The outlook also reflects the district's essentially built-out status of development and primarily residential tax base. In addition, the outlook reflects the very strong incomes in Manhattan Beach, suggesting the tax base will continue to provide adequate coverage to support debt service. We do not expect to change the rating within the two-year outlook horizon. 
          Should delinquencies substantially rise or AV declines push overall VTL ratios down to levels we no longer consider very strong, we could lower the rating. 
          Although not expected, should the district's tax base expand in parcel size or its ability to withstand a permanent delinquency percentage rate increase, both to levels comparable with those of higher-rated peers, we could raise the rating.