Fitch Comments on Cleveland-Cuyahoga County Port Ohio Authority Bond Fund.CHICAGO -- 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. notes that on Dec. 1, 2006, the Cleveland-Cuyahoga County Port Authority, Ohio Bond Fund sustained its first missed borrower payment since the inception of the program in 1997. The delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. borrower was Myers University David N. Myers University is a private, not-for-profit university located in Cleveland, Ohio. Myers University is a small university that offers a wide array of business programs, although it is no longer exclusively a business school. (the university), Cleveland's oldest four-year college. Although the bond fund was able to make up the payment from special reserves dedicated to this borrower, Myers has informed the Authority that it may not be able to make future payments unless certain federally held funds are released or the university merges with another institution. Fitch rates the development revenue bonds issued by the Cleveland-Cuyahoga County Port Authority, Ohio Bond Fund 'BBB+', with a Stable Rating Outlook. Myers's outstanding loan balance of $5.72 million represents 6.5% of the bond fund portfolio. The authority plans to use the university's additional reserves totaling $300,000 to make monthly payments until the problems are resolved or until Nov. 1, 2007, when the additional reserves will be expended ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. . Should the university fail to resolve its financial problems by then, the authority will apply the borrower's primary reserves totaling $572,500 to meet debt service. The loan is secured by a first mortgage lien lien, claim or charge held by one party, on property owned by a second party, as security for payment of some debt, obligation, or duty owed by that second party. on the university's newly renovated 40,000 square foot facility located in downtown Cleveland Downtown Cleveland is the central business district of the City of Cleveland and Northeast Ohio. Reinvestment in the area in the mid-1990s spurred a rebirth that continues to this day, with over $2 billion in capital projects slated to involve the downtown area over the next few , which was appraised at $5.2 million at the time the loan was originated in 2004. The authority has said it will provide Fitch with an updated appraisal of the facility in January 2007. Fitch is in close contact with the authority regarding the Myers University loan. Fitch expects the university will resume monthly loan repayments or engineer a sale of the facility to repay the outstanding loan balance. Maintenance of the bond fund rating at the current level presumes that there will not be a significant erosion of program reserves. The authority established the bond fund in 1997 to promote economic development efforts in the region. The loan pool consists of 22 loans totaling $87.9 million, with approximately 86% of loans to entities exhibiting speculative-grade credit characteristics. Combined dedicated and program reserves total approximately $23 million. 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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