Fitch Rates Harbor Dept. of Los Angeles, CA's Commercial Paper Notes 'F1'
KEY RATING DRIVERS:
The 'F1' rating is based on the liquidity support provided by Mizuho Bank, Ltd. (Mizuho, rated 'A-/F1', Stable Outlook) in the form of a Line of Credit Agreement (LCA) which has a stated expiration date of Aug. 24, 2018 unless extended or earlier terminated. The Mizuho LCA provides coverage for the principal amount of the notes and interest due on the maturity dates of the notes. Fitch currently rates revenue bonds of the Harbor Department of the City of Los Angeles 'AA' with a Stable Outlook (see press release dated Aug. 13, 2014 and available at www.fitchratings.com).
U.S. Bank National Association as the Issuing and Paying Agent (IPA) for the notes will draw on the LCA whenever proceeds of the sale of rollover notes and port revenues are insufficient to pay maturing notes. The LCA provides sufficient coverage for the \\$200,000,000 principal amount of notes and \\$18,000,000 in interest coverage.
The series A-1 and C-1 notes will be issued at par, with interest due at maturity. The taxable series D-1 notes can be sold at a discount. Following the occurrence of an event of default under the LCA, Mizuho may direct the IPA to immediately stop the issuance of any additional notes. Following the stop issuance notice the bank may reduce the stated amount of the LCA to the amount of notes outstanding plus interest that will become due and payable for the outstanding notes at maturity. In addition, the LCA may be terminated at Mizuho's option upon the occurrence of specified termination events. The dealers for the notes are: Ramirez & Co., Inc. and US Bancorp.
The 'F1' rating reflects the short-term rating that Fitch maintains on the 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 Harbor Department of the City of Los Angeles.