【apocalypse reborn as a monster novel】Omaha Public Facilities Corporation, NE -- Moody's assigns Aa2 to Omaha, NE's lease bonds; outlook stable

Rating Action: Moody's assigns Aa2 to Omaha,apocalypse reborn as a monster novel NE's lease bonds; outlook stable

Global Credit Research - 03 Dec 2020

New York, December 03, 2020 -- Moody's Investors Service has assigned a Aa2 rating to the City of Omaha, NE's $13.7 million Lease Revenue Bonds, Series 2020B, to be issued through the Omaha Public Facilities Corporation, NE. Moody's maintains a Aa2 rating on the corporation's previously issued lease revenue bonds and a Aa2 on the city's outstanding general obligation unlimited tax (GOULT) debt. Following the sale, the city will have $224.4 million of lease revenue bonds outstanding. The outlook is stable.

RATINGS RATIONALE

The Aa2 lease rating is based on the credit quality of the City of Omaha (Aa2 stable), which provides lease payments to cover debt service on the bonds. The absence of distinction between the Aa2 GOULT rating and the Aa2 lease rating reflects the city's pledge to make lease payments from its General Fund, a pledge which is not subject to annual appropriation.

The Aa2 GOULT rating reflects the city's role as the economic and population center of Nebraska (Aa1 stable) and its sizeable and growing tax base. Operating reserves are solid and will likely remain strong because of the city's ample revenue-raising flexibility. The coronavirus pandemic has not materially impacted the city's credits thus far. Overall finances in fiscal 2020 (year-end December 31) will likely end essentially stable because declines in budgeted revenue is being balanced by reductions in expenditures and CARES Act funding. Unemployment is currently well below the national level and economic development projects are continuing. The city's debt and pension burdens are high, however, and fixed costs will likely remain above average. Omaha's ongoing economic development and diversified economy are important mitigants as the city navigates the impacts of the coronavirus.

RATING OUTLOOK

The outlook is stable because the city's standing as a regional hub of eastern Nebraska and will continue to benefit from the presence of long-standing institutions like Offutt Air Force Base and the University of Nebraska (Aa1 stable) Medical Center. The city's strong operating reserves and growing revenue will continue to mitigate its higher leverage and fixed cost burden.

FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING

- Sustained reduction in unfunded pension liabilities

- Moderation of the debt burden

FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING

- Growth in debt or pension burdens

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- Weakening of tax base valuation or resident income indices

- Narrowing of operating reserves or liquidity

LEGAL SECURITY

The lease revenue bonds, including the Series 2020B, are secured by the city's obligation to make lease payments, which is an unconditional general obligation of the city and payable from its General Fund. The lease payments are not subject to annual appropriation.

Debt service on the city's outstanding GOULT debt is secured by its full faith and credit pledge and are payable from a dedicated ad valorem tax levy, unlimited as to rate or amount.

USE OF PROCEEDS

Proceeds will be used to finance the second of three series of debt related to improvements to the city's river front park. The remaining $20 million is expected to be issued in the fourth quarter of 2021.

PROFILE

The City of Omaha is the county seat of Douglas County (Aaa) and the largest city in the State of Nebraska (Aa1 stable). The city operates under a mayor council form of government with an elected mayor and seven member City Council. The city provides municipal services, including public safety (police and fire) and sanitary sewer service (collection and treatment) to a population of about 465,000 residents.

METHODOLOGY

The principal methodology used in this rating was Lease, Appropriation, Moral Obligation and Comparable Debt of US State and Local Governments published in July 2018 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1102364. 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 rating has been disclosed to the rated entity or its designated agent (s) and issued with no amendment resulting from that disclosure.

This rating is 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.

Katie Anthony Lead Analyst Regional PFG Chicago Moody's Investors Service, Inc. 100 N Riverside Plaza Suite 2220 Chicago 60606 US JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Tatiana Killen Additional Contact PF General Administration 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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