Standard&Poor's Ratings Services assigned its 'BBB+' long term rating to Austin, Texas' hotel occupancy tax subordinate lien variable-rate revenue refunding bonds, series 2005. The rating reflects: Recent substantial declines in the pledged hotel tax, which is subject to economic cyclicality, resulting in reduced debt service coverage (DSC); Moderate concentration in the hotel taxpayer base; The bonds' subordinate lien position; and Adequate 1.18x maximum annual debt service (MADS) coverage based on fiscal 2004 pledged hotel tax revenues. Offsetting rating factors include: Austin's diversified regional economy (AA+ GO rating), which has exhibited strong growth in employment and income levels over the past decade; and Adequate legal provisions, including a closed lien on senior lien debt. The bonds are secured by
