Fitch Affirms Roseville Natural Gas Fin Auth (California) at 'AA-'.SAN FRANCISCO San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden -- Fitch affirms its rating of 'AA-' on the Roseville Natural Gas Financing Authority (the authority) $200 million gas revenue bonds, series 2007A. The Rating Outlook is Stable. The affirmation incorporates the improved credit quality of the swap counterparty, JPMorgan Chase JPMorgan Chase (NYSE: JPM TYO: 8634 ) is one of the oldest financial services firms in the world. The company, headquartered in New York City, is one of the leaders in investment banking, financial services, asset and wealth management and private equity. With assets of $1. Bank, N.A. Fitch upgraded its rating on JPMorgan Chase Bank, N.A. on Feb. 16, 2007 to 'AA-' with a Stable Rating Outlook from 'A+' with a Positive Rating Outlook. Proceeds from the transaction were used by the authority (on behalf of the City of Roseville) to acquire a fixed, 20-year supply of natural gas to be delivered by Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. Commodities, Inc., pay costs of issuance and the customer insurance policy premium, and fund capitalized interest Capitalized interest Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing. . Given the structured nature of the transaction, the bond rating is determined by the credit quality of: --The seller guarantee provided by Merrill Lynch & Co., Inc. (rated 'AA-' with a Stable Outlook by Fitch); --The forward purchase agreement provided by Wachovia Bank, N.A. (rated 'AA-' with a Stable Outlook by Fitch); -- The swap counterparty, JP Morgan Chase Bank, N.A. (rated 'AA-/F1+' with a Stable Outlook by Fitch). The performance obligation of the City of Roseville is not a material factor in the rating given the support provided by a customer insurance policy provided by FSA FSA Financial Services Authority FSA Food Standards Agency (UK) FSA Farm Service Agency (USDA) FSA Financial Services Agency (Japan) (rated 'AAA', with a Stable Outlook) that secures the city's payments due under the supply agreement for up to two months of delivered gas until such time as the gas can be remarketed by Merrill Lynch. Fitch's rating change on the swap counterparty does not result in a rating change on the authority's bonds. However, it does eliminate the requirement for JPMorgan Chase Bank to collateralize collateralize To pledge an asset as security for a loan. A loan to a broker is collateralized by pledging securities. its obligation. According the trust indenture An agreement declaring the benefits and obligations of two or more parties, often applicable in the context of Bankruptcy and bond trading. The term indenture primarily describes secured contracts and has several applications in U.S. law. , JPMorgan Chase Bank is required to post collateral equal to three months of its fixed payment obligations to the authority when any of the three rating agencies rate JPMorgan Chase Bank below the 'AA' category. In the future, if any of the three rating agencies ratings on JPMorgan Chase Bank fall below the 'AA' category level, collateral posting will be required within two days and if any of the ratings fall below the 'A+/A1' level, the swap counterparty must be replaced within 30 days. For additional information, please see Fitch's report on the Roseville Natural Gas Authority expected to be released the week of Feb. 26, 2007. 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. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion