Fitch Affirms S-T 'F1+' Rating on State of Wisconsin Transp Rev CP
OREANDA-NEWS. Fitch Ratings has affirmed the short-term 'F1+' rating assigned to the $120,000,000 State of Wisconsin transportation revenue commercial paper notes (notes).
The rating action is in connection with (i) the substitution of the current credit agreement provided severally by the California State Teachers' Retirement System (rated 'AA+/F1+', Stable Outlook) and State Street Bank and Trust Company (State Street; rated 'AA/F1+', Stable Outlook) supporting the notes, with a credit agreement to be provided solely by State Street; and (ii) the reoffering of the notes.
KEY RATING DRIVERS
The 'F1+' rating on the notes is based on the support provided by a substitute credit agreement of State Street, which has a stated expiration date of April 20, 2019, unless extended or earlier terminated. The State Street substitute credit agreement covers principal and interest on the notes, in a combined amount of $120,000,000.
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 substitute credit agreement whenever proceeds of the sale of rollover notes and other funds are insufficient to pay maturing notes. The substitute credit agreement provides sufficient coverage for up to $120,000,000 of principal and interest due on notes upon maturity.
All notes will be issued at par, with interest due at maturity. Following the occurrence of an event of default under the credit agreement, State Street may direct the IPA to immediately stop the issuance of any additional notes. In such event, the substitute credit agreement will expire after all the notes supported by it mature and have been paid from funds drawn on it. In addition, the substitute credit agreement may be terminated by State Street upon the occurrence of specified immediate termination events. The dealers for the notes continue to be Goldman, Sachs & Co., Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC.
The rating reflects the short-term rating that Fitch maintains on the substitute bank providing liquidity support and will be adjusted upward or downward in conjunction with changes to the short-term rating of the bank and in some cases, the long-term rating of the State of Wisconsin's transportation revenue bond program and general obligations.