OREANDA-NEWS. Fitch Ratings assigns a rating of 'AA-/F1+' to the \$10,000,000 California Enterprise Development Authority variable rate demand industrial development revenue bonds (Gordon Brush Mfg. Co., Inc. Project), series 2015. The Rating Outlook for the long-term rating is Stable.

KEY RATING DRIVERS:
The rating is based on the support provided by an irrevocable direct-pay confirming letter of credit (CLOC) issued by Wells Fargo Bank, N.A. (rated 'AA-/F1+', Stable Outlook by Fitch), which confirms an irrevocable direct-pay letter of credit (LOC) issued by California United Bank, which is not rated by Fitch.

The LOC bank is obligated to make regularly scheduled payments of principal of and interest on the bonds in addition to payments due upon maturity, acceleration and redemption, as well as purchase price for tendered bonds. The CLOC bank is obligated to make a payment for all outstanding bonds in the event the LOC bank fails to honor any draw or repudiates its obligations under the LOC. The rating will expire upon the earliest of: (a) April 16, 2016, the initial stated expiration date of the CLOC, unless such date is extended; (b) conversion from the weekly rate mode; (c) any prior termination of the CLOC; and (d) defeasance of the bonds. The LOC provides full and sufficient coverage of principal plus an amount equal to 45 days of interest at a maximum rate of 10% based on a year of 365 days and purchase price for tendered bonds, while in the weekly rate mode. The CLOC provides the same full and sufficient coverage as the LOC. The Remarketing Agent for the bonds is Gates Capital Corporation. The bonds are expected to be delivered on or about April 16, 2015.

The bonds initially bear interest at a weekly rate, but may be converted to a bank interest rate or fixed rate. While bonds bear interest in the weekly rate mode, interest payments are on the first business day of each month, commencing May 1, 2015. The trustee is obligated to make timely draws on the LOC to pay principal, interest, and purchase price. In the event the LOC bank fails to honor a draw or repudiates its obligations under the LOC, the trustee will declare an event of default and direct an immediate acceleration of all the bonds and draw on the CLOC for the amount of all outstanding bonds. Funds drawn under the LOC are held uninvested or may be invested in accordance with rating guidelines and are free from any lien prior to that of the bondholders.

Holders may tender their bonds on any business day, provided the trustee is given the requisite prior notice of the purchase. The bonds are subject to mandatory tender upon conversion of the interest rate and upon substitution of the LOC or CLOC. The bonds shall be subject to mandatory redemption following trustee's receipt of notice of an event of default under the reimbursement agreement or non-reinstatement of the LOC interest. The bank has the option of directing a purchase in lieu of redemption rather than a mandatory redemption upon an event of default under the reimbursement agreement. The bonds are subject to mandatory redemption upon expiration of the LOC or CLOC. Other optional and mandatory redemption provisions also apply to the bonds. Additional bonds may be issued provided they receive a separate series designation and the LOC and CLOC are amended to cover the principal and interest of such additional bonds.

Bond proceeds will be applied to finance and refinance the cost of acquisition, rehabilitation and equipping of the property which serves as a brush manufacturing facility and pay certain costs of issuance in connection with the issuance of the series 2015 bonds.

RATING SENSITIVITIES:
The rating is exclusively tied to the short- and long-term rating that Fitch maintains on the bank providing the CLOC and will reflect all changes to that rating.