An expected 15% decline in the district's fiscal 2010 taxbase will negatively affect the collection of sales tax revenues. Fiscal 2008 pledged revenues totaled $27 million andprovided a healthy 1.9 times (x) coverage of maximum annual debt service (MADS),occurring in fiscal 2013; MADS coverage is projected to remain at a similarlevel in fiscal 2009. The sales tax revenue bonds are secured by a lien upon and pledge of a one-centdiscretionary sales tax. There are no plans to leverage sales taxrevenues further or to issue additional COPs.
The rating also reflects the underlying creditcharacteristics of the school district. The 'A' rating on the sales tax revenue bonds reflects the solid coverage ofdebt service by pledged revenues, sound growth in pledged revenues, andsatisfactory legal provisions. Keyrating drivers include the maintenance of operating flexibility in the contextof volatile state aid and the successful management of capital needs, givenexpected declines in the district's tax base. The essential nature of leased projectsenhanced by a master lease-purchase agreement, which requires the district toappropriate lease payments on an all-or-none basis, is also a credit factor. The 'A' rating on the COPs reflects the school district's healthy unreservedgeneral fund balances, limited economy exhibiting below-average wealth levels,and moderate overall debt burden. NEW YORK--(Business Wire)--In the course of routine surveillance, Fitch Ratings has affirmed the followingratings for Pasco County School Board, Florida (the school board or district): --$202 million of outstanding certificates of participation (COPs) issuedthrough June 2007 at 'A'; --$72 million of outstanding sales tax revenue bonds at 'A' The Rating Outlook is Stable. Hersha Hospitality TrustAshish Parikh, CFO, 215-238-1046 Copyright Business Wire 2009.
For a description of these factors,please review the information under the heading "Risk Factors" included in ourAnnual Report on Form 10-K for the year ended December 31, 2008, filed with theSecurities Exchange Commission. More information on the Company and itsportfolio of hotels is available on Hersha's Web site at http:// Forward Looking StatementCertain matters within this press release are discussed using forward-lookinglanguage as specified in the Private Securities Litigation Reform Act of 1995,and, as such, may involve known and unknown risks, uncertainties and otherfactors that may cause the actual results or performance to differ from thoseprojected in the forward-looking statement. Hersha focuses on high quality, upscalehotels in high barrier to entry markets. The Company also owns hotels in NorthernCalifornia and Scottsdale, Arizona. About Hersha Hospitality TrustHersha Hospitality Trust is a self-advised real estate investment trust, whichowns interests in 77 hotels, totaling 9,707 rooms, primarily along the NortheastCorridor from Boston to Washington D.C.
The Company relies on the profitabilityand cashflows of its hotels to generate sufficient cash flow for distributions. The Company`s ability to make distributions will depend on itsreceipt of distributions from its operating partnership and lease payments fromour lessees with respect to the hotels. Future distributions, if any, will be at the discretion of the Company`s Boardof Trustees and will depend on the Company`s actual cash flow, financialcondition, capital requirements, the annual distribution requirements under theREIT provisions of the Internal Revenue Code and such other factors as we maydeem relevant. The new dividend rate on common shares represents an annualized yield of 5.6%based on the closing price of Hersha`s stock on May 6, 2009.
The dividendpolicy should result in cash preservation for the Company of approximately $30million over the next twelve months, which will further strengthen our liquidityand balance sheet position," concluded, Mr Parikh. As fundamentals improve and the markets stabilizeour Board is committed to re-evaluating the dividend each quarter. Thisdecision was considered at length because of the Company`s ten year track recordof never having cut our dividend since our initial public offering in 1999." "The Company believes the reduction to be prudent and in the best interest ofshareholders at this time to preserve liquidity and maintain financialflexibility given the continued lack of visibility on the length and severity ofthe current economic downturn. Ashish Parikh, Hersha`s Chief Financial Officer, stated, "The decision by ourBoard to reduce the dividend is in response to, and comes after thoroughanalysis of, the difficult and unprecedented operating environment in thelodging industry, coupled with capital markets that remain constrained. The common share dividend and limited partnership unit distribution arepayable on July 15, 2009 to shareholders and unitholders of record on June 30,2009. The Board of Trustees also declared quarterly cash dividends of $0.05 per CommonShare and per Limited Partnership unit for the second quarter ending June 30,2009. The preferred share dividend is payable July 15,2009 to holders of record as of July 1, 2009.