Fitch Rates Nassau County Interim Finance Auth NY Bonds 'AA+'.Business Editors NEW YORK--(BUSINESS WIRE)--March 26, 2004 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 a 'AA+' rating to the Nassau County Nassau County is the name of two counties in the United States of America:
A short-term loan made to a company on the condition that a takeout will follow with long-term or intermediate financing. interim financing The financing that supports a transaction until permanent financing can be arranged. Authority, NY (NIFA NIFA Nebraska Investment Finance Authority NIFA National Intercollegiate Flying Association NIFA New International Financial Architecture (political science) NIFA North Idaho Farmers’ Association NIFA National Institute of First Assisting, Inc. or the authority) approximately $444 million sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. secured bonds, series 2004A, and a 'AA+' rating to NIFA $400 million sales tax secured variable rate bonds, series 2004B-G (auction rate securities). The bonds will sell through negotiation with Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. & Co. and 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 PaineWebber Inc. on or about March 29. Fitch also affirms the 'AA+' rating on NIFA's $1.1 billion outstanding sales tax secured bonds. The Rating Outlook is Stable. The rating incorporates elements of both municipal and structured finance credit analysis. NIFA is a bankruptcy remote issuer, and the bond structure grants a first perfected security interest in sales tax revenues, which provide strong debt service coverage, even under stress tests. Statutory and contractual covenants prohibit certain state or county actions to impair bondholder rights. The primary credit concern is the right of the State of 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 and Nassau County (the county) to alter the tax structure, but this risk is mitigated by the county's improvement in credit quality over the past several years. Recently, Fitch upgraded the county's rating to 'A-' from 'BBB+', and the county's Rating Outlook remains Positive. Stress tests show that the sales tax provides strong coverage. With this issuance, total outstanding NIFA debt increases from $1.1 billion to $1.6 billion. Projected maximum annual debt service occurs in 2011. Coverage of MADS by 2003 unaudited receipts is high at 5.4 times. NIFA's bonds are secured by a 4.25% local sales tax, less the 0.25% currently required to be paid to town and cities and the up to 0.083% authorized to be allocated to villages. The county has extended the 1.25% portion of the 4.25% state-authorized rate through Nov. 2005. The state collects sales tax revenues and distributes them to the state comptroller, from whom they flow directly to the bond trustee. The county receives residual revenues only after NIFA debt service and operating requirements are met. These bonds are the fifth and sixth series to be issued by NIFA. Series A and B proceeds will refund outstanding NIFA and county bonds for a minimum estimated net present value savings of 3% of refunded par. Bond proceeds also will fund county capital projects, tax certiorari certiorari In law, a writ issued by a superior court for the reexamination of an action of a lower court. The writ of certiorari was originally a writ from England's Court of Queen's (King's) Bench to the judges of an inferior court; it was later expanded to include writs payments, judgments, and restructuring of county debt. NIFA expects to swap auction rate interest payments on series B-G bonds to a fixed rate, utilizing a LIBOR-based formula and an agreement with highly rated counterparties. The likelihood of unplanned termination or collateral payments appears low, following a review of draft swap documents. Following this issuance, NIFA will have $660.6 million in variable rate debt outstanding, approximately $400 million of which will be swapped to a fixed rate of payment after this issue. The total variable rate exposure exceeds the $500 million limit permitted under the indenture without rating agency confirmation. In conjunction with this sale, Fitch has issued a rating confirmation letter to NIFA stating that the issuance of the 2004B-G bonds, in and of itself, will not result in a suspension, withdrawal or downgrade of the existing rating. |
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