NEW YORK (Standard&Poor's) Dec. 22, 2006--Standard&Poor's Ratings Services raised its underlying rating (SPUR) on Watsonville Redevelopment Agency, Calif.'s tax allocation bonds to 'BBB+' from 'BBB', reflecting steady growth in the project area's total assessed valuation (AV), which has resulted in strong coverage of maximum annual debt service (MADS) by both housing and nonhousing pledged revenues and a more diverse tax base. The outlook is stable. Other rating factors include a project area that is primarily commercial, a high volatility ratio of 0.43, indicating revenues are sensitive to overall fluctuations in AV, and adequate legal provisions, with an additional bonds test of 1.25x MADS. The 2004 nonhousing bonds are secured by incremental property tax revenues collected from
