Fitch Affirms S-T Rating at 'F1+' on $150MM Nassau County IFA, NY VR Bonds, Series 2008C
OREANDA-NEWS. Fitch Ratings has affirmed the short-term rating of 'F1+' assigned to the $150,000,000 Nassau County Interim Finance Authority (A Public Benefit Corporation of The State of New York) sales tax secured variable rate bonds, series 2008C.
The short-term rating action is in connection with: (i) the substitution of the liquidity support provided by JPMorgan Chase Bank, N.A. (rated 'AA-/F1+' Stable Outlook) in the form of a Standby Bond Purchase Agreement (SBPA), with a substitute SBPA issued by BMO Harris Bank, N.A. (BMO Harris, rated 'AA-/F1+' Stable Outlook); and (ii) the mandatory tender of the bonds.
KEY RATING DRIVERS:
The short-term 'F1+' rating is based on the liquidity support provided by BMO Harris, in the form of a substitute SBPA, which has a stated expiration date of Nov. 15, 2019, unless earlier terminated, during the daily, weekly and monthly interest rate modes. The long-term rating continues to be based on the rating assigned to NIFA's sales tax secured bonds. The Rating Outlook is Stable, for the long-term rating. For more information on the long-term rating, see the press release dated Sept. 30, 2015, available on Fitch's website at www.fitchratings.com.
The substitute SBPA provides for the payment of the principal component of purchase price plus an amount equal to 35 days of interest calculated at a maximum rate of 15%, based on a year of 365 days for tendered bonds during the daily, weekly, and monthly rate modes in the event that the proceeds of a remarketing of the bonds are insufficient to pay the purchase price following an optional or mandatory tender. The substitute SBPA will expire on Nov. 15, 2019, the stated expiration date; upon conversion to a mode other than daily, weekly or monthly; or upon the occurrence of certain events of default which result in a mandatory tender or other events of default related to the credit of the bonds which result in an automatic and immediate termination. A mandatory tender of the bonds is scheduled to occur today. The remarketing agent for the bonds is Citigroup Global Markets Inc.
The short-term 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 the short-term rating of the bank and, in some cases, the long-term rating of the bonds. The long-term rating is exclusively tied to the creditworthiness of the bonds and will reflect all changes to that rating.