Fitch Affirms New Jersey Economic Development Authority Cigarette Tax Revs At 'BBB'.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the underlying 'BBB' rating for the New Jersey Economic Development Authority's $1.4 billion cigarette tax revenue bonds, series 2004 and removed the bonds from Watch Negative. The bonds were placed on Watch Negative on Sept. 13, 2006 due to fiscal 2007 legislation that increased a priority health care subsidy subsidy, financial assistance granted by a government or philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare. fund transfer to $365 million from $150 million. The larger transfer would have created a cash flow shortfall for the interest payment due Dec. 15, 2006. The removal from Rating Watch reflects administrative actions taken to ensure the payment of debt service from internally generated funds and the enactment of legislation to subordinate the increased transfer. The affirmation A solemn and formal declaration of the truth of a statement, such as an Affidavit or the actual or prospective testimony of a witness or a party that takes the place of an oath. An affirmation is also used when a person cannot take an oath because of religious convictions. of the 'BBB' rating takes into consideration pledged revenues subject to appropriation The designation by the government or an individual of the use to which a fund of money is to be applied. The selection and setting apart of privately owned land by the government for public use, such as a military reservation or public building. risk, slim projected coverage, the extended 30-year maturity, heightened single-state exposure and the uncertain and declining trend of cigarette tax collections. The rating continues to reflect the exposure to potential legislative changes, including various tax increases (which have led to decline in sales and revenues) as well as the ban on indoor smoking. The ban commenced in April 2006 for bars and restaurants. The bonds are payable under a state contract between the treasurer and the authority, subject to state appropriation, solely from dedicated cigarette tax revenues. Transfers to the health care subsidy fund in the amount of $151 million have a priority claim on gross cigarette tax revenues. The amended legislation now subordinates the additional $215 million increase. Original legislation provided for a $0.65 cents per pack cigarette tax ($0.0325 per cigarette) of which 78.598% was dedicated to the bonds. Under the 2007 legislation, the cigarette tax was increased by $0.175 to $2.575 per package. The revenue pledge was not affected. Interest was capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. through June 2006; Dec. 15, 2006 was to be the initial payment of interest from dedicated revenues and the first principal maturity is June 15, 2007. The original Global Insights model of cigarette sales has not been updated. Actual cigarette sales and dedicated revenues have declined slightly less than the original model, but dropped a steep 12% in the past three years partially related to tax increases. Fiscal 2007 dedicated revenues are projected to cover maximum annual debt service (occurring in that year) by 1.13 times (x) excluding investment earnings and 1.2x including investment earnings. The Fitch stress test continues to project narrow coverage of about 1x. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, 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 Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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