OREANDA-NEWS. S&P Global Ratings assigned its 'AAA' long-term rating to Metro, Ore.'s full faith and credit refunding bonds series 2016. In addition, S&P Global Ratings affirmed its 'AAA' long-term rating on Metro's previously issued general obligation (GO) bonds and full faith and credit bonds, which we consider a form of GO debt. The outlook is stable.

Metro's full faith and credit, including the obligation to levy ad valorem property taxes without restriction as to rate or amount, secures the series 2016 and other GO bonds. Metro's full faith and credit obligations are secured by revenue from ad valorem property taxes subject to limits on the growth of assessed value and maximum levy rates.

The rating is above the U. S. sovereign rating and reflects our view that Metro would not default in a stress scenario likely to accompany a sovereign default, given autonomy from sovereign intervention. We view Metro as exhibiting relatively low funding interdependency with the federal government. For fiscal 2015, grants, some of which were federal and some state, represented 25% of total governmental expenses and local taxes and fees generated the majority of Metro's revenue. However, we would be unlikely to rate Metro's general creditworthiness more than two notches above the U. S. sovereign in the event that we were to lower the sovereign rating.

"In our opinion, Metro's very large and diverse tax base is a key credit strength," said S&P Global Ratings credit analyst Michael Stock.

The rating reflects our view of Metro's:Very large and diverse tax base, encompassing most of the Portland region;Relatively low level of funding interdependencies with the federal government;Very strong financial reserves; andLow debt burden relative to market value and rapid amortization. The stable outlook reflects our view that during our two-year outlook horizon Metro's financial position will remain very strong and possibly even increase for fiscal 2016, but is unlikely to approach its prior peak. For this reason, we do not anticipate changing our rating during this period. Should the pattern of negative net general fund operations continue, we believe that Metro can adjust excise taxes to produce additional unrestricted revenue and that a continued regional economic expansion will make this easier.

We could lower the rating if Metro's operations appear structurally imbalanced and we do not believe that Metro has a credible plan to stabilize reserves and operations, particularly if economic indicators turn negative.