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VIRGINIA PUBLIC SCHOOL AUTHORITY REFUNDING BONDS RATED 'AA' BY FITCH

VIRGINIA PUBLIC SCHOOL AUTHORITY REFUNDING BONDS RATED 'AA' BY FITCH
 NEW YORK, Nov. 27 /PRNewswire/ -- Virginia Public School Authority's $120.7 million School Financing Bonds (1987 Resolution), 1991 Refunding Series C are rated 'AA' by Fitch. The authority plans to sell the bonds through public bids on Dec. 3. This issue will refund $20.7 million 1963 Resolution bonds and $87.3 million 1987 Resolution bonds, to effect an interest cost saving. The 'AA' rating also applies to $383.9 million bonds remaining outstanding under the 1987 Resolution and to $119.7 million bonds remaining outstanding under the 1963 Resolution. The credit trend is stable.
 The interest savings accruing from the refunding will be used in part to fund the liquidity account requirement for the 1987 Resolution bonds in lieu of a Commonwealth of Virginia general fund cash transfer or a credit facility. The liquidity account provides additional security for the Jan. 2-July 1 period to ensure 1.11 times coverage until Literary Fund notes become available to the reserve fund for the 1987 Resolution bonds (after full provision of 1963 Resolution debt service).
 Authority bonds are strongly secured from repayments of general obligation loans made to local units for schools and the collateral availability of repayments of similar cash-funded loans made from the Literary Fund, a constitutional perpetual fund of the commonwealth for educational purposes. In addition, state aid will be intercepted in the event of a default by a local unit, although the program has experienced no defaults in its nearly 30 year history.
 The local loan repayments are synchronized with the authority's own bond requirements to meet debt service. Including the cash flow from the Literary Fund loan repayments, authority debt service is covered a generous 1.44 times. Additional bonds may be issued under the 1987 Resolution if all debt service is covered 1.11 times, but policy has dictated the higher actual level.
 All local loans, whether funded by the authority or by the Literary Fund, are general obligations. Participation in the program is broad and the operations of the authority/Literary Fund should be seen as an integral part of educational policy and financing in the commonwealth.
 -0- 11/27/91
 /CONTACT: Claire G. Cohen, 212-908-0552, or Ruth Corson Maynard, 212-908-0596, both of Fitch/ CO: Virginia Public School Authority ST: Virginia IN: SU: RTG


KD -- NY045 -- 7823 11/27/91 15:12 EST
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Date:Nov 27, 1991
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