Fitch Rates California Economic Recovery VRDBs Series 2004C.Business Editors NEW YORK--(BUSINESS WIRE)--June 8, 2004 Fitch has assigned ratings to the $1.5 billion State of California, economic recovery bonds, series 2004C. The long-term component of the ratings assigned to the series 2004C-1 through series 2004C-5 bonds is based on the 'A+' rating Fitch has assigned to the State of California's economic recovery bonds. (For a description of the rating factors, see the report on the State of California, General Obligation Economic Recovery Bonds, dated April 30, 2004 and available on the 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. web site at 'www.fitchratings.com'.) The short-term component of each rating is based on separate standby bond purchase agreements (SBPAs) provided as follows: -- $100MM series 2004C-1 rated 'A+/F1+' with the short-term rating based on the SBPA SBPA Simple Branch Prediction Analysis SBPA Scottish Beer and Pub Association (UK) SBPA School of Business and Public Administration SBPA School-Based Performance Award SBPA School-Based Performance Awards provided by Landesbank Baden-Wurttemburg, 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 Branch; -- $50MM series 2004C-2 rated 'A+/F1+' with the short-term rating based on the SBPA provided by Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. , N.A. (BofA); -- $100MM series 2004C-3 rated 'A+/F1+' with the short-term rating based on the SBPA provided by Landesbank Hessen Thuringen Girozentrale, New York Branch; -- $150MM series 2004C-4 rated 'A+/F1' with the short-term rating based on the SBPA provided by 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; and -- $100MM series 2004C-5 rated 'A+/F1+' with the short-term rating based on the SBPA provided by BofA. Each SBPA provides for the payment of the principal component of purchase price for tendered bonds and an amount equal to 35 days of interest at a maximum rate of 11% per annum Per annum Yearly. based on a 365-day year. The series 2004C-1 and 2004C-3 SBPAs will expire on Dec. 31, 2015 unless extended or earlier terminated pursuant to their terms. The series 2004C-2, 2004C-4 and 2004C-5 SBPAs will expire on June 15, 2007 unless extended or earlier terminated pursuant to their terms. The ratings assigned to the series 2004C-6 through series 2004C-11 bonds are based on irrevocable direct-pay letters of credit (LOCs) as follows: -- $200MM series 2004C-6 rated 'AA+/F1+'based on the LOC LOC - lines of code provided by Ctibank, N.A.; -- $100MM series 2004C-7 rated 'AA/F1+' based on the LOC provided by BNP Paribas BNP Paribas (Euronext: BNP, TYO: 8665 ) is one of the main banks in Europe and France. It was created on 23 May 2000 through the merger of Banque Nationale de Paris (BNP) and Paribas. , 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 Branch (BNP BNP B-type natriuretic peptide, brain natriuretic peptide Physiology A 32-residue peptide hormone produced predominantly in the ventricles, secreted in response to fluid overload–eg, CHF. See Atrial natriuretic peptide. ); -- $100MM series 2004C-8 rated 'AA+/F1+' based on the LOC provided by Lloyds TSB Lloyds TSB Group plc (LSE: LLOY) is a banking and insurance group in the United Kingdom. It was formed in 1995 by the merger of Lloyds Bank and the Trustee Savings Bank (TSB). The Group's head office is at 25 Gresham Street, London. Bank, New York Branch; -- $100MM series 2004C-9 rated 'AA-/F1+' based on the LOC provided by The Bank of Nova Scotia, New York Branch; -- $250MM series 2004C-10 rated 'AA/F1+' based on the LOC provided by BNP; and -- $250MM series 2004C-11 rated 'AA/F1+' based on the LOC provided by BNP. Pursuant to the LOCs, the banks are obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to make payments of (1) principal of and interest on the bonds upon maturity and redemption, and (2) purchase price for tendered bonds. The ratings will expire on the earliest of: (a) June 15, 2009, the stated expiration date Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Notes: The expiration date for all listed stock options in the U.S. of the LOCs unless such date is extended; (b) any prior termination of the LOCs; and (c) defeasance of the bonds. The LOCs provide full coverage of principal plus an amount equal to 35 days of interest at a maximum rate of 11% based on a 365-day year and purchase price for tendered bonds. Lehman Brothers Inc. is the representative of the underwriters for the transaction. The bonds are expected to be delivered June 16, 2004. Fitch also will assign ratings to $1.474565 billion of the State of California economic recovery bonds, series 2004C, consisting of: $150MM series 2004C-12 bonds; $100MM series 2004C-13 bonds; $250MM series 2004C-14 bonds; $237.285MM series 2004C-15 bonds; $237.285MM series 2004C-16; $50MM series 2004C-17; $50MM series 2004C-18; $150MM series 2004C-19; $200MM series 2004C-20; and $50MM series 2004C-21 bonds. The long-term ratings to be assigned to the series 2004C-12, 2004C-13, 2004C-14, 2004C-17, 2004C-18, 2004C-19, 2004C-20 and 2004C-21 bonds will be based on municipal bond insurance Municipal bond insurance An insurance policy which guarantees payment on municipal bonds in the event of default . municipal bond insurance A guarantee from a third party that principal and interest will be paid to a bondholder. policies which are expected to be provided by XL Capital Assurance Inc. (currently rated 'AAA' by Fitch). The long-term ratings to be assigned to the series 2004C-15 and 2004C-16 bonds will be based on municipal bond insurance policies which are expected to be provided by Financial Security Assurance Inc. (currently rated 'AAA' by Fitch). The short-term rating to be assigned to the series 2004C-12, 2004C-13, 2004C-14, 2004C-17, 2004C-18 and 2004C-19 bonds will be based on the SBPAs to be provided by DEPFA DEPFA Deutsche Pfandbriefanstalt (German bonds Institution) Bank plc, New York Agency (with a Fitch short-term rating of 'F1+'). The short-term rating to be assigned to the series 2004C-15, 2004C-16, 2004C-20 and 2004C-21 bonds will be based on the SPBAs to be provided by Dexia Credit Local, New York Agency (with a Fitch short-term rating of 'F1+'). Each policy will insure scheduled payments of principal and interest, effective as of the date of issuance of the bonds and will extend to the maturity date of the bonds. Each SBPA will provide for the payment of the principal component of purchase price and an amount equal to 35 days of interest calculated at a maximum rate of 11% per annum based on a 365-day year. The series 2004C-12 through 2004C-16 SBPAs will expire on June 15, 2011 unless extended or earlier terminated pursuant to their terms. The series 2004C-17 through 2004C-21 SBPAs will expire on June 15, 2014 unless extended or earlier terminated pursuant to their terms. The series 2004C-1 through 2004C-9 bonds will be issued in the daily rate mode. The series 2004C-10 through 2004C-21 bonds will be issued in the weekly rate mode. The bonds may bear interest in daily, weekly, flexible, term, auction or index interest rate modes. While the bonds bear interest in the daily and weekly rate modes, interest is payable on the first business day of each month, commencing July 1, 2004. Holders of bonds bearing interest at a daily or weekly rate mode may tender their bonds for purchase with prior notice. The bonds of each series are subject to mandatory tender: (i) on interest mode conversion dates; (ii) on the day following the last day of each flexible interest rate period; and (iii) upon the expiration, termination or substitution of the LOC or SBPA relating to a series of bonds. The bonds are also subject to mandatory sinking fund sinking fund, sum set apart periodically from the income of a government or a business and allowed to accumulate in order ultimately to pay off a debt. A preferred investment for a sinking fund is the purchase of the government's or firm's bonds that are to be paid redemption and optional redemption. Bond proceeds will be used to finance a portion of the State of California's accumulated budget deficit. |
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