Rating Action: Moody’s assigns A2 to Indianapolis Local Public Improvement Bond Bank’s (IN) Series 2021A bonds; outlook stableGlobal Credit Research – 04 Feb 2021New York, February 04, 2021 — Moody’s Investors Service, (“Moody’s”) has assigned an A2 rating to Indianapolis Local Public Improvement Bond Bank, IN’s $438 million Bonds, Series 2021A. The new bonds are issued by the Indianapolis Local Public Improvement Bond Bank and are ultimately secured by certain excise taxes and other revenue of the Capital Improvement Board (CIB). Concurrently, Moody’s has affirmed the A1 rating on the Capital Improvement Board’s Series 2007C bonds. The outlook on the current issuance as well as the Series 2007C bonds is stable. Post issuance the CIB will have approximately $500 million in rated debt.RATINGS RATIONALEThe A2 rating is notched off Indianapolis-Marion County (the city), IN’s Aaa issuer rating reflecting abatement risk of certain payments if the facilities cannot be occupied, the nature of the financed asset, which is the Bankers Life Fieldhouse that we consider to be less essential to municipal operations, the relatively narrow stream of various economically sensitive pledged revenue and the subordinate call on certain revenue also pledged to the 2007C Bonds. The rating also considers the availability of newly pledged revenue, on which the proposed bonds will have first call, but also recognizes that these revenues have been impacted by current economic conditions. We consider the coronavirus pandemic a social consideration and a key driver of the current rating actions given the impact on CIB revenue. Pledged revenues have been materially pressured by the pandemic and are likely to continue to be affected to some extent over the next several years. However, the proposed structure reduces debt service costs materially for the next three years.The A1 rating on the Series 2007C bonds reflects strong debt service coverage provided by the senior lien pledge of various excise taxes. The rating also incorporates a debt service reserve sized at maximum annual debt service (MADS), which is not available for the Series 2021A bonds. The special tax debt is not structured as a lease and is not subject to abatement risk.RATING OUTLOOKThe stable outlook on the Series 2021A and 2007C bonds reflects expected improvement in debt service coverage over the next several years resulting from the proposed debt refunding. The stable outlook also incorporates our expectation that CIB operating reserves will remain sound and provide additional financial support for outstanding obligations.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS- Elimination of abatement risks (Series 2021A)- Bolstering of pledged revenue that leads to increased debt service coverage and stronger financial reservesFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS- Weakening of the city’s issuer rating (Series 2021A)- Prolonged underperformance of pledged revenue or weakening of operating reservesLEGAL SECURITYThe Series 2021A bonds are limited obligations of the Bond Bank and are ultimately secured by payments made on qualified obligations (Marion County Convention and Recreational Facilities Authority Lease Rental Bonds, Lease Rental Refunding Bonds and CIB Excise Tax Revenue Bonds) which are ultimately secured by a subordinate call on certain CIB revenue including the Original Innkeeper’s Tax, Original Marion County Food and Beverage Tax, Original Supplemental Auto Rental Excise Tax, and State Cigarette Tax. The 2021A bonds also benefit from a Senior lien on the 1997 Innkeeper’s Tax, Original Sports PSDA Revenue, 2009 Innkeeper’s Tax Increase, 2013 Supplemental Auto Rental Excise Tax Increase and Hotel PSDA Revenue. Lease payments made by the CIB to the Marion County Convention and Recreational Facilities Authority are subject to abatement if the facilities cannot be occupied and is somewhat mitigated by two years of rental interruption insurance.The Series 2007C bonds are secured by a senior lien on the Original Innkeeper’s Tax, Original Marion County Food and Beverage Tax, Original Admissions Tax, Original Supplemental Auto Rental Excise Tax, and State Cigarette Tax. The Series 2007C bonds are not structured as a lease and are not subject to abatement.USE OF PROCEEDSBond proceeds from the Series 2021A bonds will be used to finance improvements to the Bankers Life Fieldhouse, provide long-term financing for previously issued bond anticipation notes, cash defease the Series 2011D, 2011I, 2012B and the Series 2011K bonds. Remaining proceeds will be used to refund the remainder of the Series 2011K bonds.PROFILEThe CIB is a component unit of the city and is authorized to construct, lease, and operate various facilities. CIB operates the Indiana Convention Center, Bankers Life Fieldhouse, and Victory Field. The CIB is also operates the Lucas Oil Stadium, for which the CIB is currently under a lease with the State of Indiana.METHODOLOGYThe principal methodology used in the lease rating was Lease, Appropriation, Moral Obligation and Comparable Debt of US State and Local Governments published in January 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1260202. An additional methodology used in the lease rating was US Public Finance Special Tax Methodology published in January 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1260087. The principal methodology used in special tax rating was US Public Finance Special Tax Methodology published in January 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1260087. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies.REGULATORY DISCLOSURESFor 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. 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