S&P: City Of Knox, Indiana (Toll IN LLC) Series 2014 Rating Lowered To 'A-/A-2'
The downgrade follows the replacement of the irrevocable direct-pay letter of credit (LOC) that Bank of America N. A. ('A/WatchPos/A-1') had provided with a new LOC from SunTrust Bank ('A-/A-2').
The 'A-/A-2' rating reflects our opinion of the credit and liquidity support that SunTrust Bank provides in the form of an irrevocable direct-pay LOC during the weekly interest rate mode (the rated mode). The LOC covers the entire principal balance and 35 days of interest accruals at a 10% maximum bond rate. During the rated modes, we believe that the coverage amount is sufficient to pay bond principal and maximum accrued interest considering the same-day interest reinstatement period and any additional time that may elapse before a full payment is made to the bondholders.
The 'A-' long-term component of our rating is based on our long-term issuer credit rating on SunTrust Bank and addresses our expectation of full and timely interest and principal payments when the bondholders have not exercised the put option. The 'A-2' short-term component of our rating is based on our short-term issuer credit rating on SunTrust Bank and addresses our expectation of full and timely interest and principal payments when the bondholders have exercised the put option.
In view of the bond structure, changes to our rating on the bonds can result from, among other things, changes to our rating on the LOC provider or amendments to the transaction's terms. We will maintain a rating on the bonds as long as they are in the rated mode and the LOC has not expired or otherwise terminated. If either of these conditions changes, we will likely withdraw our rating on the bonds.