Fitch Rates $44MM Rhode Island Econ Dev Corp Motor Fuel Tax Bonds 'A'.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. assigns an 'A' rating to approximately $43.66 million Rhode Island Economic Development Corporation (RIEDC RIEDC Rhode Island Economic Development Corporation ) Rhode Island motor fuel tax revenue bonds, series 2006A. The bonds are expected to sell the week of Jan. 30 through negotiation with a syndicate led by UBS UBS Union Bank of Switzerland
UBS United Bible Societies
UBS United Blood Services
UBS United Buying Service
UBS Used Bookstore
UBS University Business Services
UBS Universal Building Society (UK)
UBS Ulaanbaatar Broadcasting System Investment Bank. Fitch also affirms the 'A' rating on RIEDC's approximately $53 million outstanding motor fuel tax revenue bonds.
The 'A' rating reflects the good legal protections governing the program, including the legislatively dedicated two cents of the state's 30-cent motor fuel tax that secures the bonds and the statutory cap on total debt and debt service. The pledged revenues are subject to state appropriation and there are covenants to include such amounts in the governor's proposed state budget. Once appropriated, pledged revenues are remitted to the trustee according to the payment agreement executed by key officials in the administration. The motor fuel tax bonds provide the state's approximately 20% share of four priority transportation projects to be financed primarily with federal transportation funds. One series of state motor fuel tax revenue bonds was sold in 2003, and a final offering of about $15 million is expected in 2009 to coincide with project construction.
Pledged revenues are stable but slow growing. The additional bonds test Additional bonds test
A test for ensuring that bond issuers can meet the debt service requirements of issuing any new additional bonds.
additional bonds test of 1.25 times (x) maximum annual debt service (MADS) is lenient, and coverage from dedicated revenue is narrow, although retention of residual funds for program purposes provides some offset. Coverage of projected MADS after all three issues is 1.25x based on 2005 revenues. For the bonds now offered and planned issuance, projected coverage is around 1.3x to 1.6x. There are provisions for a debt service reserve fund equal to 50% of MADS, which can be eliminated if coverage of 2x MADS is maintained for three years, as well as an additional 50% held in a residual reserve. Upon release from either reserve, surplus funds may be used for debt service and pay-as-you-go project costs.
These bonds are separately secured from grant anticipation bonds that are providing the remaining 80% of the priority transportation project costs. The second series of such bonds, repayable from federal transportation funds, is being issued concurrently with this issuance. The projects being constructed are critical to the state transportation program and are part of the approved multi-year transportation improvement program for the Rhode Island Department of Transportation (RIDOT RIDOT Rhode Island Department of Transportation ).
The state imposes a 30-cent per gallon motor fuel tax, yielding $142.7 million in fiscal 2005, equal to $4.76 million per penny. Since 1994, motor fuel taxes have been credited to the Intermodal Surface Transportation Fund (ISTF ISTF Internet Science and Technology Fair
ISTF Interface Simulation and Testing Framework (IONA)
ISTF International Society of Tropical Foresters
ISTF International Spring Trade Fair (Karachi, Pakistan) ). Motor fuel taxes are legislatively allocated to RIDOT, the state general fund, the department of elderly affairs for elderly transportation, and for public transportation. Since 1999, RIDOT's share of the motor fuel tax has been 20.75 cents, including the 2 cents for this program.
RIDOT is responsible for the construction and maintenance of nearly all state roads, bridges and transportation facilities, and administers the state and federal highway construction assistance programs.
The bonds will be due June 15, 2007-2026 and are callable Callable
Applies mainly to convertible securities. Redeemable by the issuer before the scheduled maturity under specific conditions and at a stated price, which usually begins at a premium to par and declines annually. beginning June 15, 2016.
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