Rating Action: Moody's assigns Aa2 to Fort Wayne, IN's lease bondsGlobal Credit Research - 24 Feb 2022New York, February 24, 2022 -- Moody's Investors Service has assigned a Aa2 rating to the City of Fort Wayne, IN's $10.2 million Lease Rental Revenue Refunding Bonds, Series 2022 (Grand Wayne Center Project) issued by the Fort Wayne Redevelopment Authority. Moody's maintains the Aa1 issuer rating on the city and the Aa2 rating on the city's outstanding lease revenue bonds secured by a property tax pledge. Following the sale, the city will have approximately $46 million of rated lease revenue bonds secured by a property tax pledge outstanding. The outlook is stable.The issuer rating represents Moody's assessment of hypothetical debt of the city supported by a general obligation unlimited tax (GOULT) pledge. The city does not currently have any outstanding debt supported by a GOULT pledge.RATINGS RATIONALEThe Aa1 issuer rating reflects the city's large tax base that serves as a regional economic hub for northeast Indiana (Aaa stable), below-average resident income levels, a trend of operating surpluses that have further strengthened the city's healthy financial position and moderate debt and pension burdens.The Aa2 rating on the new and outstanding lease revenue bonds are one notch lower than the Aa1 issuer rating, reflecting both abatement risk if the properties are unable to be used and the less essential nature of the financed projects (a convention center for the Series 2012 bonds and current issuance, a parking structure and office space for the Series 2014A bonds, and a parking garage and stadium for the Series 2014 bonds). These risks are weighed against the city's pledge to levy ad valorem property taxes to fund lease payments, subject to Indiana's Circuit Breaker taxing limitations.RATING OUTLOOKThe stable outlook reflects the city's growing tax base and strengthening financial position. Revenue growth and careful management of expenses led to substantial fund balance increase in 2020. Positive operations are expected for 2021 and 2022.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING- Strengthened socioeconomic profile- Significantly reduced debt burdenFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING- Erosion of the local economy and tax base - Narrowing of reserves - Increased debt burden LEGAL SECURITY The new and outstanding lease revenue bonds are ultimately secured by the city's pledge to levy an ad valorem property tax in an amount sufficient to pay debt service, a pledge which is subject to abatement risk if the property is unable to be used. The tax is also subject to Indiana's Circuit Breaker taxing limitations.USE OF PROCEEDSProceeds of the new bonds will currently refund the city's outstanding Lease Rental Revenue Bonds, Series 2012 for interest savings. The borrowing initially financed construction of a convention center.PROFILEThe City of Fort Wayne is located approximately 120 miles northeast of Indianapolis-Marion County (Aaa stable), and serves as the seat of Allen County. It is the second largest city in Indiana, with an estimated population of nearly 265,000.METHODOLOGYThe principal methodology used in this rating was Lease, Appropriation, Moral Obligation and Comparable Debt of US State and Local Governments Methodology published in November 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1298498. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.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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