Printer Friendly

Fitch Rts Virginia PSA $130.7MM 1997 Resolution Bonds 'AA+'.

Business Editors

NEW YORK--(BUSINESS WIRE)--April 15, 2004

Fitch Ratings assigns a 'AA+' rating to the Virginia Public School Authority's (VPSA) $130.7 million school financing bonds (1997 resolution), series 2004A. The bonds will be sold competitively April 22, and are due Aug. 1, 2005-2029. Bonds due after Aug. 1, 2104 are callable at par. The 'AA+' rating on the authority's $1.9 billion outstanding 1997 resolution bonds is affirmed.

These bonds are the sixteenth issuance under the separately secured 1997 resolution, which continues the commonwealth's program of providing loans to local units for school construction purposes. This resolution enables greater structural and borrowing flexibility for the local county and city issuers and simplifies program administration. It supplants school financings previously accomplished under the 1987 and 1991 resolutions. All outstanding 1987 resolution bonds are now refunded and the 1991 resolution has neared its borrowing cap.

Initial security for the 1997 resolution bonds is the same as for the prior resolutions: repayments of the general obligation loans made to local units for schools at 10 basis points above the authority's borrowing costs, and the strong state aid intercept, which transcends fiscal years and under which the commonwealth immediately advances funds in the event of a local unit's default. There have been no local defaults in VPSA's more than 35-year operating history. However, unlike the prior resolution programs, ultimate security derives from a 'sum sufficient' appropriation for debt service from the Literary Fund (a constitutional perpetual fund receiving escheats, unclaimed property, etc.) and from the commonwealth's general fund if there is insufficiency in the Literary Fund. The governor must include the sum sufficient appropriation in the biennial budget bill, a security feature now codified, and the 2002-2004 budget bill includes such an appropriation. This provision upfronts the commonwealth's own credit for this program and in essence provides two times coverage of debt service, contributing to the high quality rating and differentiating this security from bonds issued under the prior 1987 (now refunded) and 1991 resolutions, which are rated 'AA' by Fitch.

The commonwealth's current financial pressures are contributing to renewed reliance on the Literary Fund to provide for teachers' retirement costs after not needing such funds in 1999-2001. In fiscal 2002 through fiscal 2004 over $110 million was used in each fiscal year to provide for these expenses. The executive budget for the 2004-2006 biennium includes over $130 million for such expenses in each of fiscal 2005 and fiscal 2006.
COPYRIGHT 2004 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2004, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Date:Apr 15, 2004
Previous Article:PLX Technology, Inc. Reports First-Quarter 2004 Financial Results.
Next Article:ADVISORY/Major New Cook Group Company Announcement.

Related Articles
Fitch Rates $135MM Virginia Port Authority Bonds 'AA+'.
Fitch Affirms TBTA's - New York - BANs At 'F1+'.
Fitch Rts Virginia Pub Sch Authority $175.1MM '97 Resolution Bds 'AA+'.
Fitch Rts Virginia Public School Authority $201.1MM '97 Resolution Bds 'AA+'.
Fitch Rts VA PSA $201.1MM 1997 Resolution Bonds 'AA+'.
Fitch Rts Virginia PSA $312.86MM 1997 Resolution Refs 'AA+'.
Fitch Rates VA Pub School Authority $149MM Bonds 'AA+'.
Fitch Rates Maryland CDA's $170.1MM Resi Rev Bnds 'AA/F1+'.
Fitch Rates Resurrection Health Care Series 2005 'A+'; Outlook Stable.
Fitch Rates University Health System of Eastern Carolina's $478MM Bonds 'AA-'; Affirms Outstanding.

Terms of use | Privacy policy | Copyright © 2018 Farlex, Inc. | Feedback | For webmasters