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IOWA FINANCE AUTHORITY UNDERGROUND STORAGE TANK BONDS RATED 'A+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Jan. 7 /PRNewswire/ -- Iowa Finance Authority's $39.6 million Underground Storage Tank Fund Revenue Bonds 1994 Series A are rated "A+" by Fitch. The bonds are expected to be sold by negotiation through CS First Boston and Piper Jaffrey, Inc. later this month. Dated Jan. 1, 1994, the bonds will be payable July 1 as serial or term maturities in years to be determined. Bonds will be optionally callable on dates and in amounts yet to be determined. The credit trend is stable.
 The Underground Storage Tank Bonds are well protected by the dedication of a portion of the yield from Iowa's tax on motor vehicle sales. Total proceeds of the tax are far in excess of the authority's allotment, allowing for likely volatility under adverse conditions. These bonds will be on a parity with $75.5 million outstanding series 1990 and 1991 bonds.
 In order to clean up past damage from underground oil storage tanks and to allay this condition in the future, Iowa has earmarked 25% of the first receipts from the 4% portion of the 5% sales tax on motor vehicles (or 80% of the total tax but not to exceed $15.3 million annually, for an underground storage tank (UST) fund. With the 25% increase in the tax in 1992-93 to 5%, the securing allocation to the UST was adjusted to 25% of 80% of the total collections, and the annual allotment raised from $12.0 million to $15.3 million. The pledged tax, now levied at 5%, yielded a total of $152 million in 1993, which would cover the authority's maximum allotment nearly 10 times. The 25% allotment would, in turn, provide 2.0 times coverage for the $15.3 million available for the bonds. The margins of coverage are very comfortable and should allow leeway even under very adverse conditions.
 Iowa has no general obligation bonds outstanding and other debt commitments are minor. That Iowa has backed this program with its own taxing power indicates its overall importance to the state.
 -0- 1/7/94
 /CONTACT: Ruth Corson Maynard of Fitch, 212-908-0596/


CO: Iowa Finance Authority ST: Iowa IN: SU: RTG

PS -- NY036 -- 0174 01/07/94 13:03 EST
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Publication:PR Newswire
Date:Jan 7, 1994
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