Fitch Rates School Building Authority of West Virginia's $48MM Excess Lottery Revs 'A'.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 -- 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 'A' rating to approximately $48 million School Building Authority of West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. (authority) excess lottery revenue bonds, series 2009B, expected to be offered through negotiation the week of Nov. 16, 1009. Fitch has also affirmed the 'A' ratings on $132 million outstanding parity series 2008 and series 2009A bonds and approximately $222 million excess lottery revenue bonds issued by the West Virginia Economic Development Authority, which have a prior claim on the same revenue stream. The Rating Outlook is Stable. The bonds are being issued as taxable qualified school construction bonds and are structured with one bullet maturity. Investors will receive a tax credit against their federal income tax liability at a rate determined by the U.S. Treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. in lieu of current interest payments. The authority will make 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 payments, which will accumulate to pay principal when due. The 'A' rating considers the discretionary nature of lottery revenues, which are sensitive to population, personal income, and employment factors, as well as to existing and future competition. Offsetting these inherent uncertainties is the ample coverage of debt service by lottery excess revenues, the essentiality of the authority's projects, and the success of the lottery commission to-date in adapting to an increasingly competitive environment. The bonds are limited obligations of the authority, payable solely from the trust estate which receives a statutory allocation of a portion of the profits from limited video lottery and the racetrack video lottery. The authority is a state-created political subdivision charged with implementing the state's school construction and improvement program. Racetrack video lottery is offered at the four state racing tracks and accounted for approximately 58% of total lottery sales in fiscal 2009. Limited video lottery is offered at nearly 1,615 venues in 54 of the state's 55 counties and accounted for another 28% of total lottery sales in fiscal 2009. Both lotteries are regulated by the West Virginia Lottery The West Virginia Lottery is run by the state government. It is a member of the Multi-State Lottery Association (MUSL). It offers games such as Powerball, Hot Lotto, and numerous scratch tickets. It also runs video lottery, including the MUSL-sponsored Cashola. Commission. A statutory allocation of $19 million is made to the excess lottery school building debt service fund from the state's excess lottery revenue fund to secure debt service on the current and outstanding parity bonds Parity Bond Two or more bond issues with equal rights to bond payments. Notes: Also referred to as "part passu" or "pari passu" bonds, these types of fixed-income securities are commonly issued by municipalities as a way to gather finance capital. . The revenue fund is funded from revenues of two of the state's five lottery games: the limited video lottery and racetrack video lottery games, from which $385 million was credited to the excess lottery revenue fund in fiscal year 2009, a 5% decrease from the prior year. The state is projecting a continued revenue reduction over the next three years, primarily reflecting increasing gaming competition. The $19 million allocation is subject to prior statutory allocations consisting of a homestead credit, estimated to be $10 million annually, and a similar $19 million for the economic development authority bonds (also rated 'A' by Fitch; no rating distinction is made due to the ample debt service coverage for both; fiscal 2009 available revenues provide 7.9 times [x] coverage of statutorily allowed debt service). In addition, a parity allocation of $10 million is made to the higher education higher education Study beyond the level of secondary education. Institutions of higher education include not only colleges and universities but also professional schools in such fields as law, theology, medicine, business, music, and art. improvement fund. Debt service for the authority's school construction program is expected to ultimately approximate the statutory allocation. Although further subordination of debt service on the bonds is possible, there are currently no plans to do so. West Virginia's state lottery A game of chance operated by a state government. Generally a lottery offers a person the chance to win a prize in exchange for something of lesser value. Most lotteries offer a large cash prize, and the chance to win the cash prize is typically available for one dollar. revenue fund, which receives the state's share of net profits from instant and online games (for example, scratch-off and POWERBALL multi-state lotto) and from a portion of net terminal income derived from racetrack video lottery, provides additional statutory security to the extent that revenues are available. Additional information is available at 'www.fitchratings.com'. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP HTTP in full HyperText Transfer Protocol Standard application-level protocol used for exchanging files on the World Wide Web. 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