CHANNELS

Subscribe to the InfoTech eNewsletter

infoTECH News

TMCNet:  Fitch Rates State Pub Works Board Lease Rev Bds (Univ of CA) 'AAApre'; Watch Negative

[January 15, 2014]

Fitch Rates State Pub Works Board Lease Rev Bds (Univ of CA) 'AAApre'; Watch Negative

NEW YORK --(Business Wire)--

Fitch Ratings has assigned a rating of 'AAApre', Rating Watch Negative to the following bonds:

--$70,845,000 State Public Works Board of the State of California (SPWB) Lease Revenue Bonds (The Regents of the University of California) 2006 Series E (University of California Research Project), maturing Oct. 1, 2014 - Oct. 1, 2031;

--$49,850,000 SPWB Lease Revenue Refunding Bonds (The Regents of the University of California) 2007 Series B (Various University of California Projects), maturing June 1, 2015 - June 1, 2019;

--$234,925,000 SPWB Lease Revenue Bonds (The Regents of the University of California) 2008 Series A (UC Irvine Medical Center Replacement Hospital), maturing March 1, 2014 - March 1, 2033;

--$22,720,000 SPWB Lease Revenue Bonds (The Regents of the University of California) 2008 Series B (UC San Francisco Moffitt and Long Hospital Seismic Upgrade), maturing March 1, 2014 - March 1, 2033;

--$10,850,000 SPWB Lease Revenue Bonds (The Regents of the University of California) 2008 Series C (Natural Sciences Unit 2 - McGaugh Hall Expansion), maturing June 1, 2014 - June 1, 2023;

--$149,640,000 SPWB Lease Revenue Bonds (The Regents of the University of California) 2009 Series E (Various University of California Projects), maturing April 1, 2014 - April 1, 2034;

--$36,755,000 SPWB Lease Revenue Bonds (The Regents of the University of California) 2009 Series F (San Diego Campus Various Improvements), maturing April 1, 2014 - April 1, 2034.

KEY RATING DRIVERS:

The rating of 'AAApre', Rating Watch Negative is based on the pledge of securities in the escrow deposit funds securing each respective series of bonds and reflects the lien of the refunded bondholders on the escrow trust funds and that all amounts have been invested in: (1) direct non-callable obligations of the United States; and (2) non-callable senior obligations of Fannie Mae (FNMA) and Freddie Mac (FHLMC) (with the exception of the 2008 series C bonds, where amounts have been solely invested in direct non-callable obligations of the United States). The U.S. full faith and credit is currently rated 'AAA' on Rating Watch Negative by Fitch. As the ratings of FNMA and FHLMC are currently linked to the U.S. sovereign rating, any rating action on the U.S. sovereign rating will directly affect the rating on the bonds with escrow trust funds invested in those securities. Should Fitch's view of the strength of government support for FNMA/FHLMC be reduced or downgraded, the rating of FNMA/FHLMC may be delinked from the U.S. sovereign rating and may result in negative pressure on the rating of the bond series supported by those securities.

The bonds were refunded on Oct. 2, 2013 with portions of the proceeds of the $2,458,550,000 The Regents of the University of California general revenue bonds 2013 series AI, series AJ (taxable), series AK and series AL (variable rate demand bonds), as well as amounts released from various accounts associated with the refunded bonds. The ratings apply to the bonds listed by CUSIP numbers, below.

Pursuant to seven separate irrevocable escrow agreements, the State Treasurer, as escrow agent, holds separate special irrevocable escrow accounts, established by the State Controller within the State's Treasury, in trust for the benefit of the refunded bondholders for each respective series. All cash and securities held in the accounts are pledged irrevocably to the payment when due of interest on the refunded bonds and the payment of principal upon redemption. In the future, any substitute investments for the 2008 series C bonds are limited to direct non-callable obligations of the United States and any substitute investments for the remaining six series of bonds are limited to direct non-callable obligations of the United States and obligations of FNMA or FHLMC not callable prior to maturity. The 2006 series E bonds will be redeemed at par on Oct. 1, 2016, with the exception of the Oct. 1, 2014 - Oct. 1, 2016 maturities which will be paid at maturity; the 2007 series B bonds will be paid at maturity on June 1, 2015 - June 1, 2019; te 2008 series A bonds and 2008 series B bonds will be redeemed at par on March 1, 2018, with the exception of the March 1, 2014 - March 1, 2018 maturities which will be paid at maturity; the 2008 series C bonds will be redeemed at par on June 1, 2018, with the exception of the June 1, 2014 - June 1, 2018 maturities which will be paid at maturity; and the 2009 series E and 2009 series F bonds will be redeemed at par on April 1, 2019, with the exception of the April 1, 2014 - April 1, 2019 maturities which will be paid at maturity.

Causey Demgen & Moore P.C. verified the mathematical accuracy of computations relating to the adequacy of income from escrowed funds to pay debt service requirements of each respective series of refunded bonds. These computations were contained in schedules provided to them by Barclays Capital, the underwriter for the refunding bonds. According to the Causey Demgen & Moore verification report, the securities and cash deposited will produce amounts necessary for timely payment of the principal and interest on each respective series of refunded bonds. Prior to accepting substitute or additional investment securities, the escrow agent must receive a new report verifying the continued sufficiency of escrowed funds to meet all future payments of principal and interest on each series of refunded bonds.

RATING SENSITIVITIES:

The rating is currently exclusively tied to the U.S. sovereign creditworthiness and will reflect all changes to that rating. Should Fitch's view of the strength of government support for FNMA/FHLMC be reduced or downgraded, the rating of FNMA/FHLMC may be delinked from the U.S. sovereign rating and may result in negative pressure on the rating of the bond series supported by those securities.

The rating of 'AAApre' on Rating Watch Negative applies to the bonds with the following CUSIP numbers:

2006 Series E

1306843C5

1306843D3

1306843E1

1306843F8

1306843G6

1306843H4

1306843J0

1306843K7

1306843L5

1306843M3

1306843N1

1306843P6

1306843Q4

1306843R2

1306843S0

1306843T8

1306843U5

1306843V3

1306843W1

2007 Series B

130685CK4

130685CL2

130685CM0

130685CN8

130685CP3

2008 Series A

130685JU5

130685JV3

130685JW1

130685JX9

130685JY7

130685JZ4

130685KA7

130685KB5

130685KC3

130685KD1

130685KE9

130685KF6

130685KG4

130685KH2

130685KJ8

130685KK5

130685KL3

130685KM1

130685KN9

130685KP4

2008 Series B

130685KV1

130685KW9

130685KX7

130685KY5

130685KZ2

130685LA6

130685LB4

130685LC2

130685LD0

130685LE8

130685LF5

130685LG3

130685LH1

130685LJ7

130685LK4

130685LL2

2008 Series C

130685LS7

130685LT5

130685LU2

130685LV0

130685LW8

130685LX6

130685LY4

130685LZ1

130685MA5

130685MB3

2009 Series E

130685UH1

130685UJ7

130685UK4

130685UL2

130685UM0

130685UN8

130685UP3

130685UQ1

130685UR9

130685US7

130685UT5

130685UU2

130685UV0

130685UW8

130685UX6

130685UY4

130685UZ1

2009 Series F

130685VE7

130685VF4

130685VG2

130685VH0

130685VJ6

130685VK3

130685VL1

130685VM9

130685VN7

130685VP2

130685VQ0

130685VR8

130685VS6

130685VT4

130685VU1

130685VV9

130685VW7

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Criteria', Feb. 27, 2013;

--'Guidelines for Rating Prerefunded U.S. Municipal Bonds', Dec. 2, 2013.

Applicable Criteria and Related Research:

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701570

Guidelines for Rating Prerefunded U.S. Municipal Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724818

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=814850

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.


[ InfoTech Spotlight's Homepage ]


blog comments powered by Disqus

FOLLOW US

Subscribe to InfoTECH Spotlight eNews

InfoTECH Spotlight eNews delivers the latest news impacting technology in the IT industry each week. Sign up to receive FREE breaking news today!
FREE eNewsletter