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Fitch Rates Rhode Island Clean Water Finance Agency Drinking Water SRF.

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 the Rhode Island Rhode Island, island, United States
Rhode Island, island, 15 mi (24 km) long and 5 mi (8 km) wide, S R.I., at the entrance to Narragansett Bay. It is the largest island in the state, with steep cliffs and excellent beaches.
 Clean Water Finance Agency's (the agency) $9.5 million safe drinking water revolving fund revenue bonds series 2009A (pooled loan issue). The bonds are expected to price during the week of Oct. 26, 2009 via negotiation. Bond proceeds will be loaned to three borrowers for certain drinking water projects through the safe drinking water state revolving fund (DWSRF DWSRF Drinking Water State Revolving Fund (United States) ). In addition, Fitch affirms the rating on approximately $114.4 million of outstanding DWSRF bonds at 'AAA'. The Rating Outlook is Stable.

The 'AAA' rating on the developing DWSRF program reflects strong default tolerance due to sizable reserves and high loan credit quality. DWSRF federal capitalization grants are typically deposited into a reserve fund, which is available to cure loan defaults from the statewide pool of municipal borrowers. After this issue, DWSRF reserves will equal $30.3 million or approximately 25% of outstanding bonds and provide continued bond performance assuming 83.3% defaults over the next four years.

As additional security, the agency could invest its clean water state revolving fund (CWSRF CWSRF Clean Water Act State Revolving Fund ; loan pool program is rated 'AAA' by Fitch) or DWSRF reserves in either pool should any of the borrowers default, which is permitted under the 2004 cross-investment agreement. However, the agency is not legally 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 use this feature.

As of this issue, the DWSRF portfolio comprises 21 borrowers, which have made general obligation or water utility pledges to back their loans. Overall credit quality is strong, with 92% of all outstanding principal secured by borrowers with public investment grade ratings. Pawtucket is the pool's largest borrower representing approximately 39% of the portfolio.

Additional information is available at

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Publication:Business Wire
Geographic Code:1U3IL
Date:Oct 12, 2009
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