Fitch to Affirm City of Philadelphia, PA Airport Rev CP Notes Series A-1,B-1 & C-1 'F1' Rating
The rating action is in connection with (i) the substitution of the current irrevocable direct-pay letter of credit (LOC) provided by Barclays Bank PLC ('A/F1'/Stable Outlook) supporting the notes with an LOC to be provided by Sumitomo Mitsui Banking Corporation, (Sumitomo; 'A/F1'/ Negative Outlook) and (ii) the reoffering of the notes.
KEY RATING DRIVERS
On the effective date, the short-term rating on the notes will be affirmed at 'F1' based on the support of the substitute LOC to be issued by Sumitomo which has a stated expiration date of Sept. 13, 2019, unless extended or earlier terminated. The Sumitomo substitute LOC provides coverage for the principal amount of the notes and interest on the maturity dates of the notes.
U. S. Bank National Association will continue as the Issuing and Paying Agent (IPA) for the notes and as IPA is directed to request an advance under the LOC to pay principal and interest on maturing notes. The substitute LOC provides sufficient coverage for the principal amount of notes and 270 days of interest calculated at 12% based upon a 360 day year.
The notes may be issued at par, with interest due at maturity. The subseries C-1 notes may also be issued at a discount.
Following the occurrence of an event of default under the LOC, Sumitomo may direct the IPA to immediately stop the issuance of any additional notes. The bank will also notify the IPA that the stated amount of the LOC shall be permanently reduced to the principal amount of notes then outstanding and interest due thereon, and shall be further permanently reduced following the maturity of any such notes. In such event, the substitute LOC will expire after all the notes supported by such LOC mature and have been paid from funds drawn on the substitute LOC. In addition, Sumitomo may issue a final drawing notice directing the IPA to draw on its LOC for the principal of and interest due on all notes outstanding in which case the LOC will expire on the earlier of (i) the 15th calendar day after the date on which the IPA received the final drawing notice and (ii) the date on which the drawing resulting from the delivery of the final drawing notice is honored. Barclays Capital Inc., Loop Capital Markets, PNC Capital Markets LLC and Wells Fargo Securities Inc. continue as the dealers for the notes.
The rating is exclusively tied to the short-term rating that Fitch maintains on the substitute bank providing the LOC and will reflect all changes to that rating.