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OREGON BOND BANK $11.86 MILLION REVENUE BONDS RATED 'A' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Oct. 27 /PRNewswire/ -- The State of Oregon's, Oregon Bond Bank, $11.86 million revenue bonds, (Oregon Economic Development Department) 1993 series C are rated 'A' by Fitch. The $22 million outstanding 'A' parity bonds are affirmed. The credit trend is stable. This issue is expected to be sold through negotiation the week of Nov. 8 by a Lehman Brothers-led syndicate.
 Oregon Bond Bank's 'A' rating reflects the prior bond indenture's requirement that all bonds be structured so that loan repayments due on the bond bank loans and their related collateral loans equal at least 120 percent of annual bond debt service. Under the 1993 refunding bond indenture, the additional bonds test requires that overall debt service coverage be at least 1.10 times (x) on the aggregate portfolio of loans and that any loan without an attendant collateral loan be made only to those borrowers Fitch determines to be at least 'A' credit quality. Additional cash flow will continue to be pledged to these bonds by a diverse portfolio of 46 pledged loans to 34 borrowers. With a par amount of $8.4 million, these loans result in solid, 1.18x-1.63x projected bond debt service coverage. These features clearly indicate that the Oregon Bond Bank Program, implemented by the state through its Special Public Works Fund (SPWF), is well conceived.
 Offsetting these strengths is the overall 'BBB+' level credit quality of the program's 30 primary municipal borrowers' loan portfolios. While most of the main revenue sources securing the loan repayments should be exempt from the Measure 5 tax limitation, some primary borrowers' taxing capacities have been affected. In addition, current debt service coverage levels will be eroded since there is no intent to pledge additional future direct loans when additional parity bonds are issued.
 In 1985, the Oregon State Legislature created the SPWF with proceeds from the state lottery; the fund is administered by the state's Economic Development Department. That legislation also authorized issuance of up to $100 million in revenue bonds to establish an infrastructure bond bank program; in 1993, this maximum was raised to $200 million. These bonds are the sixth issuance under that program. In addition to the bond bank program, the SPWF also makes direct grants and loans to local governments for economic development. Since 1985, the department has awarded more than $47 million in direct SPWF grants and loans to over 150 local governments. The portfolio is current and there have been no defaults. All three programs require continued biennial lottery allocations by the Oregon State Legislature. Senate Bill 81 (the Water Act) recently authorized the Economic Development Department to issue water revenue bonds to finance loans for local drinking water and wastewater projects through the creation of a Water Fund. While neither the SPWF Act nor the Water Act permits such water program revenue bonds to be issued on parity with these bond bank program revenue bonds, the current bond bank indenture allows for this possibility if enabling legislation were to be passed.
 -0- 10/27/93
 /CONTACT: Andrea R. Bozzo, 212-908-0515, or Gamal Harris, 212-908-0541, both of Fitch/


CO: Oregon Bond Bank ST: Oregon IN: FIN SU: RTG

TM -- NY104 -- 7485 10/27/93 16:13 EDT
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Publication:PR Newswire
Date:Oct 27, 1993
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