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ST. PAUL PORT AUTHORITY RESPONDS TO S&P COMMON BOND FUND DOWNGRADE

 ST. PAUL PORT AUTHORITY RESPONDS TO S&P COMMON BOND FUND DOWNGRADE
 ST. PAUL, Minn., Oct. 23 /PRNewswire/ -- The following statement was issued today by Kenneth R. Johnson, president of the St. Paul Port Authority:
 It would be fair to say we have a difference of opinion with Standard & Poor's over the effect of the proposed restructuring plan for the Res. 876 Common Bond Fund Program.
 We are astounded by S&P's inaccurate assertion that the Port Authority does not have a "viable workout plan" for the 876 Program. They could not be more incorrect. What S&P apparently does not understand is that it is not possible to simply increase program revenues due to the way project leases within the Common Bond Fund are structured.
 The restructuring plan presented by the Port Authority is, in fact, a workout of a severely stressed real estate portfolio that averts the prospect of future bond defaults, which the Port Authority warned of publicly last January.
 While it is true the plan calls for bondholder concessions, it is at best misleading to characterize this restructuring effort as a bond default.
 Furthermore, we are disappointed by S&P's action because there has been no change in the cash flows or assets of the Common Bond Fund Program. We feel it is both premature and confusing to the marketplace to change the rating at this time prior to a final court decision. We also query the timing of S&P's action, given the fact the Port Authority was scheduled to meet with the rating agency in New York City early next week to further explain its plan.
 In addition, to downgrade the entire 876 bond program at this time, when it has been made clear that the earlier maturing bonds (prior to Dec. 1, 1999) would not be affected by the restructuring proposal is inexplicable, and does a disservice to bondholders.
 It is our counseled opinion that if and when the Ramsey County District Court issues an implementation order, the credit quality of the 876 bonds would be immediately strengthened and enhanced. The Port Authority and its advisers put together the restructuring package for the long-term benefit of all 876 bondholders, and was the primary reason behind the year-long planning effort. This is something S&P has clearly overlooked in taking this unfortunate action.
 -0- 10/23/92
 /CONTACT: Mike Strand of the St. Paul Port Authority, 612-224-5686/ CO: St. Paul Port Authority ST: Minnesota IN: SU:


AL -- MN014 -- 4352 10/23/92 17:10 EDT
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Publication:PR Newswire
Date:Oct 23, 1992
Words:421
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