MOODY'S ASSIGNS A' RATING TO CERTIFICATES OF PARTICIPATION
OFFERED BY THE STATE OF WASHINGTON
NEW YORK, Nov. 19 /PRNewswire/ -- Moody's Investors Service today assigned an "A" rating to $39.46 million of State of Washington Certificates of Participation (State Equipment Series A) expected to be sold Nov. 20.
Certificate security rests with the credit standing of the State of Washington which, through its State Finance Committee, has agreed to make lease payments. Lease payments are not to be released or discharged for any reason; however, payments are dependent on biennial legislative appropriations to participating state agencies, and are also subject to executive order reductions by the governor. These limitations and the use of certificate proceeds for equipment underlie the rating assigned.
The state's credit position is derived from the accumulation of comfortable reserve levels during the late 1980s when economic performance was strong. The state is responding appropriately to emerging economic softening and related revenue shortfalls by making midcourse spending adjustments. Debt levels remain above comparable medians, but projected borrowing appears manageable, in view of the expectation of continued, though slower, economic growth.
The bankruptcy risk associated with the participation of a private sector entity as lessor and assignor of payment rights to trustee has been mitigated through the transaction's legal structure.
/CONTACT: Steven Hochman, 212-553-0338, or James Dearborn, 212-553-1910, both of Moody's/ CO: State of Washington ST: Washington IN: SU: RTG FC-OS -- NY043 -- 4947 11/19/91 12:14 EST