Standard&Poor's Ratings Services affirmed its 'BBB+' underlying rating (SPUR) on Watsonville Redevelopment Agency, Calif.'s series 2004A, 2004B-1, and 2004B-2 tax allocation bonds. The rating outlook is stable. The rating reflects our view of the project area's: Medium size at 1,830 acres that is primarily commercial; Very strong coverage of 3.58x maximum annual debt service (MADS) based on nonhousing tax increment revenues, and strong coverage of 2.82x MADS based on housing set-aside tax increment revenues; and Adequate bond provisions, with an additional bonds test (ABT) of 1.25x MADS. Tempering the rating is our view of the project area's high volatility ratio of 0.41, indicating revenues are sensitive to overall fluctuations in assessed value (AV). Securing the series 2004A tax
