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Fitch Ratings assigns 'AA' rating to Nevada COPs.

Chicago: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, assigned an 'AA' rating to approximately $12.5 million series 2018A certificates of participation (COPs) issued by the Nevada System of Higher Education (NSHE).

The COPs are payable from all legally available NSHE funds after payment of debt service on the system's outstanding senior lien university revenue bonds (URBs). The COPs are an absolute and unconditional pledge of the system and are not subject to annual appropriation or abatement risk. State operating appropriations are specifically not pledged. COP proceeds will fund capital expenditures and pay issuance expenses. The COPs are expected to sell by competitive bid on March 7, 2018.

The 'AA' rating reflects the system's strong state-wide market position, gradually improving student demographics, current increases in state operating support, moderate debt burden and adequate balance sheet ratios. Negative GAAP operating margins and narrow institutional coverage remain offsetting factors.

The system's obligation to pay debt service on the subordinate lien COPs and parity note obligations is absolute and unconditional. In addition, significant revenue is available for this debt that is not pledged to the senior lien URBs. The potential for credit dilution from URB issuance persists.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Date:May 12, 2018
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