Summary
PICA’s bonds are secured by a 1.5% wage tax on city residents, collected by the city but held in a separate account under state control, ensuring they are insulated from municipal budget pressures. Debt service coverage was reported at over 8x maximum annual debt service, expected to strengthen as debt amortizes through 2023. The rating is linked to Pennsylvania’s financial health, as PICA was created by state legislation and plays an oversight role in the city’s finances. The stability of pledged revenue, strong debt service coverage, and declining outstanding debt all contribute to the robust rating. S&P does not expect significant revenue volatility, given the resilience of wage and net profit tax collections.