Fitch Rates Oklahoma School District Rev Antic. Program Notes.AUSTIN, Texas -- 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 'F1+' short-term rating to the Oklahoma School District and County Revenue Anticipation Program's $2.4 million certificates of participation (COPs) 2006 series A, and an 'F1' rating to the program's $3.8 million COPs 2006 series B. The COPs mature June 29, 2007 and are scheduled to sell the week of July 17 via negotiation to Stephens Inc. The Rating Outlook is Stable. The COPs evidence proportionate interests of owners in trust estates to be composed principally of certificates of indebtedness of six Oklahoma public school districts. Oklahoma law allows districts to participate in such short-term cash management programs to alleviate projected cash deficits arising principally from timing mismatches between the receipt of property taxes and operating expenditures. The Oklahoma Commission on School and County Funds Management (the commission), staffed by officials of the Oklahoma State Department of Education, approves districts' participation in such programs and provides a degree of oversight. Program funds are to be placed under an investment agreement with a provider rated at least 'A/F1+' by Fitch Ratings. Timely note payment for each series requires full scheduled repayments by each participating district in each series, as no district is liable for repayment obligations of other participants. The high-quality short-term ratings of the COPs primarily reflect the protections provided by Oklahoma's state aid intercept law, which was enacted in 2002. The law requires the state to withhold state aid moneys due a school district that does not make timely payments to a short-term cash management program bond trustee, which will notify the state of such non-payments. To receive approval for participation in the program, districts submitted monthly fiscal 2007 cash flow projections A Cash Flow Projection is an attempt to forecast the cash flows that will be generated by an asset, often a company, over a specified time frame. Methodology Projections can be made with varying levels of detail, but any cash flow projection for a business entails to the commission; these projections were the primary basis of Fitch's review of participating districts' credit quality. One risk for the COPs is that state aid payments are vulnerable to proration Proration A situation during a corporate action in which the available cash or shares are not sufficient to satisfy the offers tendered by shareholders. Therefore, a proportion of both cash and shares is granted for each offer tendered. should state budgetary problems arise. Given the improving state economy and increases in education funding for fiscal 2007 as reported by state officials, this risk appears minimal. Historical district fund balances and tax base diversity are additional credit considerations and have been considered in the 'F1+' and 'F1' ratings assigned to the notes. The 'F1+' rating for the 2006 series A COPs reflects the very strong projected coverage of debt service by May and June 2007 state aid receipts (following required repayment of advances) and/or strong historical or projected fund balances of districts participating in this series. Both of the 2006 series A district applications (Canadian Valley and Fox) projected that estimated April 30, 2007 general fund balances after required note repayment would cover maximum debt service by a minimum of 1.6 times (x). Additionally, anticipated state aid for these districts in May and June 2007, when combined with projected fund balances, provide additional comfort for certificateholders. The 'F1' rating for the 2006 series B COPs reflects the substantial amount of state aid expected to be interceptable, if needed, as well as estimated general fund balance to cover maximum projected payment obligations of four beneficiary districts (Catoosa, Coyle, Fort Gibson Fort Gibson was established 1824 in Indian Territory by Col. Matthew Arbuckle. It was named for Col. George Gibson, head of the Army Commissary Department. The fort was the westernmost in the north–south chain of forts intended to protect the frontier in the American West. , and Wynona). Projected April 2007 general fund balances cover maximum payment obligations by a minimum of 1.33x for these four districts; when May and June 2007 state aid is included, coverage climbs to 1.9x-2.7x, depending on the district. Fort Gibson, which receives 40% of its revenue from property taxes, relies on one company, Oklahoma Gas and Electric Co. (senior unsecured and short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. rated 'A+' and 'F1', respectively, by Fitch), for 78% of its tax base. Accordingly, the 2006 series B COP rating is based in part on this taxpayer's ratings. The district's short-term creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. also is supported by its own credit characteristics, as well as the intercept law. The COPs are executed and delivered pursuant to a trust indenture An agreement declaring the benefits and obligations of two or more parties, often applicable in the context of Bankruptcy and bond trading. The term indenture primarily describes secured contracts and has several applications in U.S. law. between Stephens Inc., as settlor One who establishes a trust—a right of property, real or personal—held and administered by a trustee for the benefit of another. settlor n. , and BancFirst of Oklahoma City Oklahoma City (1990 pop. 444,719), state capital, and seat of Oklahoma co., central Okla., on the North Canadian River; inc. 1890. The state's largest city, it is an important livestock market, a wholesale, distribution, industrial, and financial center, and a farm , OK, as trustee. Stephens Inc. grants and conveys to the trustee all rights to, title to, and interest in the notes. Legal opinions reviewed by Fitch conclude that this Oklahoma trust would not be considered property of the estate of Stephens Inc., which is not rated by Fitch, subject to any hypothetical creditor claims if the settlor were to file for bankruptcy protection under 11 U.S. Code A multivolume publication of the text of statutes enacted by Congress. Until 1926, the positive law for federal legislation was published in one volume of the Revised Statutes of 1875, and then in each sub-sequent volume of the statutes at large. 1101 of the U.S. Bankruptcy Code Bankruptcy Code may refer to:
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