Fitch Rates $829MM Massachusetts Water Pollution Trust Pool Program 'AAA'.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. assigns an 'AAA' rating to approximately $421 million Massachusetts Water Pollution Abatement Trust (MWPAT) pool program bonds, series 12 and approximately $408 million pool program refunding bonds, series 2006. The bonds are scheduled to price on Nov. 21 through a syndicate led by Bear Stearns The Bear Stearns Companies, Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., one of the largest global investment banks and securities trading and brokerage firms in the world. & Co. Fitch also affirms the 'AAA' rating on approximately $1.3 billion in outstanding pool program bonds and on approximately $812 million subordinate lien pool program refunding bonds. Bond proceeds will be used to finance or refinance costs of certain water pollution control projects and drinking water drinking water supply of water available to animals for drinking supplied via nipples, in troughs, dams, ponds and larger natural water sources; an insufficient supply leads to dehydration; it can be the source of infection, e.g. leptospirosis, salmonellosis, or of poisoning, e.g. projects for borrowers. The Rating Outlook is Stable. The 'AAA' ratings for MWPAT's federally capitalized state revolving fund revolving fund n. A fund established for a certain purpose, such as making loans, with the stipulation that repayments to the fund may be used anew for the same purpose. Noun 1. (SRF SRF abbr. somatotropin-releasing factor ) programs are due primarily to the large amount of senior lien senior lien n. the first security interest (lien or claim) placed upon property at a time before other liens, which are called "junior" liens. (See: mortgage, deed of trust, lien, UCC-1) reserves, which total over $788 million or approximately 38% of outstanding pool bonds. Of the total loans outstanding to the MWPAT, approximately 75% represent general obligations of the participants, with the remainder backed by water and wastewater revenues. Contract assistance payments by the Commonwealth of Massachusetts (general obligation bonds rated 'AA' by Fitch) constitute 17.5% of pledged revenues. The loan pool consists of over 260 borrowers. Massachusetts Water Resources Authority The Massachusetts Water Resources Authority (MWRA) is a public authority in the Commonwealth of Massachusetts that provides wholesale drinking water and sewage services to certain municipalities and industrial users in the state, primarily in the Boston area. (MWRA MWRA Massachusetts Water Resources Authority MWRA Mid-West Regional Authority (Ireland) MWRA Married Women of Reproductive Age MWRA Midwest Whippet Racing Association MWRA Medical Waste Regulatory Act (Michigan) ; senior and subordinate lien revenue bonds rated 'AA' and 'AA-', respectively, by Fitch) remains the largest borrower in the pool program's portfolio, making up approximately 21% of outstanding loan principal. The top 10 borrowers make up nearly 45% of outstanding obligations. While the pool's concentration is likely to continue to grow, the MWPAT has the flexibility of providing future loans to the MWRA through the separate MWRA program, allowing the MWPAT to manage the pool program's exposure to the MWRA. The MWPAT's program bonds issued for its clean water state revolving fund (SRF) and drinking water SRF exhibit significant levels of tolerance to loan repayment defaults. The senior and subordinate refunding bonds could continue to meet debt service requirements, assuming 76% defaults for the first four years. Given the loan pool's current credit quality, structural default tolerance levels exceed Fitch's 'AAA' SRF bond rating guidelines by a 4.15:1 margin. Pledged revenue sources exhibit strong credit quality. Fitch estimates that at least 87% of program participants exhibit investment-grade credit quality. Underlying loans are also subject to a state intercept mechanism in the event of delinquent repayments, further enhancing bondholder security. Loan repayments provide an estimated 68% of pledged revenues, while the commonwealth's 'AA' rated general obligation contract assistance payments provide over 17% of pledged revenues. Interest earnings on MWPAT's substantial reserves, which come from reserve fund investment agreements meeting Fitch's 'AAA' investment guidelines, and which serve to subsidize borrower interest costs, provide the remaining 15% of pledged revenues. 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