Fitch Rates Wisconsin's $100MM Clean Water Revs 'AA+'.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 'AA+' rating to the State of Wisconsin's (the state) approximately $100 million clean water revenue bonds, 2006 Series 2. The bonds are scheduled to sell competitively on October 17th. In addition, Fitch affirms the 'AA+' rating on the state's $676.7 million of outstanding clean water revenue bonds. The Rating Outlook is Stable. The 'AA+' rating reflects the bonds' strong tolerance to borrower defaults, Wisconsin's substantial financial commitment to the clean water fund program (CWFP CWFP Clean Water Fund Program CWFP Christopher Wahren Fine Photographs CWFP Clean Water Farms Project CWFP Concerned Women for Family Planning CWFP Critical Weed-Free Period CWFP CEOS WSSD Follow-up Programme CWFP Campus Worship Formation Program ), and the requirement to maintain a reserve fund at levels sufficient to preserve current ratings. Bond proceeds will be used to fund loans to municipalities for wastewater treatment facility construction and improvements through Wisconsin's clean water fund program. The state contributes 19% of debt service costs in the form of a state general obligation (GO) debt service payment of outstanding bonds purchased for the program. This contribution reduces local borrowing costs. Therefore, credit prospects are connected to the GO credit quality of the state of Wisconsin, rated 'AA-' by Fitch Ratings as well as the largest borrower, Milwaukee Metropolitan Sewerage District The Milwaukee Metropolitan Sewerage District (MMSD) is a state-chartered government agency which provides wastewater services for 28 municipalities within Milwaukee County and also portions of the surrounding counties. (MSD (MicroSoft Diagnostics) A utility that accompanied Windows 3.1 and DOS 6 that reported on the internal configuration of the PC. A variety of information on disks, video, drivers, IRQs and port addresses was provided. ) rated 'AA+'. State GO subsidy and Milwaukee MSD obligations together represent about 40% of program cash flows expected to fulfill bond debt service requirements. Given the program's ample reserves, just over 30% of all loans could default for the first four years without causing a bond default; this is well above the 10% default level currently required by Fitch's 'AA' stress test for a loan portfolio with such a credit distribution. The reserves, which are tied to borrower credit quality and are expected to be sized at $90 million or 12% of total outstanding bond principal, provide protection if future loans are made to less creditworthy cred·it·wor·thy adj. Having an acceptable credit rating. cred  it·wor borrowers. Additional bondholder protection is provided by a tested state aid intercept mechanism and the state's ability to move troubled loans from the pledged leveraged portfolio to other loan pools within its environmental improvement fund, which also includes the separate, federally capitalized clean water and drinking water drinking water supply of water available to animals for drinking supplied via nipples, in troughs, dams, ponds and larger natural water sources; an insufficient supply leads to dehydration; it can be the source of infection, e.g. leptospirosis, salmonellosis, or of poisoning, e.g. state revolving funds (SRFs), and a loan fund for contaminated contaminated, v 1. made radioactive by the addition of small quantities of radioactive material. 2. made contaminated by adding infective or radiographic materials. 3. an infective surface or object. land remediation. The pledged loan pool continues to expand and diversify. The leveraged CWFP portfolio consists of loans to over 200 local borrowers. Overall, an estimated 84% of all principal outstanding is attributable to borrowers exhibiting investment-grade characteristics. The pool's five largest borrowers, Milwaukee, Madison, and Green Bay MSD's, along with the City of Manitowoc and Delafield-Hartland Pollution Control Commission, constitute 37% of the portfolio. These borrowers all have an estimated credit quality in the 'A' and 'AA' categories. Borrowers exhibit strong geographic dispersion throughout Wisconsin. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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