Revised: Fitch Places Toledo-Lucas Cnty Port Auth, OH, Bond Fund Revs on Rating Watch Negative.CHICAGO -- (This replaces the previous release, with a corrected date for the letter of credit expiration, in the final paragraph.) 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. places the 'BBB+' rating on the Toledo-Lucas County Port Authority The Toledo-Lucas County Port Authority is a port authority financing and/or operating air, rail, trucking, and port facilities, as well as supporting and funding economic development activities in Lucas County, located in northwest Ohio and bordering on southeast Michigan. , OH (the authority) Northwest Ohio Northwest or northwestern Ohio consists of multiple counties in the northwestern corner of the US state of Ohio. This area borders Lake Erie, southern Michigan, and eastern Indiana. Some areas in northwestern Ohio are also considered the Black Swamp area. Bond Fund (the bond fund) on Rating Watch Negative. The bond fund has outstanding $83.9 million of revenue bonds. The Rating Watch Negative reflects recent Chapter 11 bankruptcy filings by two of the pool's participants, Dana Corp. and Engineered Plastic Products Inc (EPP (1) (Enhanced Parallel Port) See IEEE 1284. (2) (Ethernet Packet Processor) A chip from Kalpana, Inc., Santa Clara, CA that doubles speed of Ethernet transmission to 20Mbits/sec. In 1994, Kalpana was acquired by Cisco. ). Both companies are auto parts Auto parts are components of automobiles. They mainly are, in alphabetic order (only car specific articles or articles with car section):
Dana Corp., which makes up 8.1% of the bond fund's portfolio ($6.8 million), filed for bankruptcy under Chapter 11 on March 3. The bond fund's bonds issued on behalf of Dana Corp. are secured by lease payments that are backed by a subordinate mortgage lien and security interest on Dana's research and development facility and equipment, located in Lucas County Lucas County is the name of two counties in the United States:
EPP, which accounts for 3.0% of the portfolio ($2.5 million), missed its March 1 monthly lease payment to the bond fund, and on March 8, filed under Chapter 11. The bonds issued on behalf of EPP are secured by lease payments backed by a shared first security interest in the financed equipment. The next lease payments by Dana Corp. and EPP are due April 1. Fitch will look to see if these and future payments are made and whether the companies choose to affirm their leases with the Port Authority through the bankruptcy court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. , which may take several months. While the bond fund's reserves remain adequate to absorb any permanent losses that may be incurred as a result of the two bankruptcies, Fitch is concerned that these events could compromise the credit quality of the pool if primary or program reserves are needed to meet debt service payments during the bankruptcy process. Also, given the known problems facing the auto industry, Fitch is concerned that other automotive companies in the bond fund's portfolio may declare bankruptcy or default on their obligations. Auto part manufacturers make up 32.2% of the bond fund's portfolio. The authority established the bond fund in 1988 to advance economic development efforts in the region. The bond fund currently has 24 participants, with bonds outstanding totaling $83.9 million. The City of Toledo is currently the program's largest obligor and represents 10.9% of the total portfolio. In addition to lease or loan payments by the pool participants, all of the bond funds' bonds are equally and ratably secured by funds held in reserves, which equal $23.9 million or 28.5% of the principal of all outstanding bonds. The bond fund's reserves comprise: primary reserves, funded by each borrower equal to approximately 10% of bond principal; program reserves, which include a $6.5 million cash contribution from the authority and a $6.5 million irrevocable letter of credit Irrevocable letter of credit Assurance of funds issued by a bank that cannot be canceled or amended without the beneficiary's approval. from Fifth Third Bank that expires Nov. 15, 2014, subject to extension; and additional reserves specific to certain series of bonds. Shortfalls in bond payments due to loan or lease defaults must be made up first from the defaulting borrowers' primary reserves, then from program reserves, and finally from any remaining primary reserves. 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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