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VIRGINIA PUBLIC SCHOOL AUTHORITY $36.59 MILLION BONDS RATED 'AA' BY FITCH -- FITCH FINANCIAL WIRE --

VIRGINIA PUBLIC SCHOOL AUTHORITY $36.59 MILLION BONDS RATED 'AA'
 BY FITCH -- FITCH FINANCIAL WIRE --
 NEW YORK, Oct. 16 /PRNewswire/ -- Virginia Public School Authority's $36.59 million school financing bonds (1991 Resolution), Series 1992, are rated 'AA' by Fitch. To be offered for bids on Oct. 20, the bonds will be due Aug. 1, 1992-2013 and callable Aug. 1, 2002 at 102 percent. The authority reserves the right to alter the principal amount of the issue by $1.5 million. The bonds, the second issue under the separately secured 1991 Resolution, are payable from pledged funds including repayment of authority loans to local schools, sale of local general obligations, any legislatively appropriated funds, and the reserve fund (10 percent of principal, maximum annual debt service or 125 percent of average annual debt service) to which the Commonwealth of Virginia has a deficiency make-up provision, the so- called "moral obligation". The authority has further covenanted to invoke the state aid intercept provision in the event of default by a local borrower.
 The second series of bonds issued under the 1991 Resolution, proceeds will be used to fund loans to local units for school purposes. Unlike bonds issued under the 1963 and 1987 Resolutions, also rated 'AA', and which are secured in part by the repayments of direct loans made by the Commonwealth's Literary Fund to local units, the 1991 Resolution bonding program essentially replaces the funding previously available from the Literary Fund. A direct appropriation from the Literary Fund will accompany bond proceeds to the local units, thus effectively buying down the overall interest cost to a level equal to that of direct Literary Fund lending, were it available. Literary Fund monies for lending purposes are not expected to be available for the remainder of the 1992-94 biennium as they have been used to make contributions to the teachers' retirement fund. Five cities and 13 counties are participating in this issue.
 The authority is an integral part of the commonwealth's educational policy and financing. The local loans are all general obligations of the units, state aid will be intercepted in the event of a default, and payments from the units are due well before the payment dates on the bonds, strengthening this mechanism. The commonwealth's general obligation bonds are rated 'AAA' and its deficiency make-up provision to the extent of $500 million bonds signals its involvement in the program. Finally, the loan program of the authority has experienced no defaults in its 30-year history.
 -0- 10/16/92
 /CONTACT: Claire G.Cohen, 212-908-0552, or Ruth Corson Maynard, 212-908-0596, both of Fitch/ CO: Virginia Public School Authority ST: Virginia IN: SU: RTG


AH -- NY075 -- 1135 10/16/92 17:01 EDT
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Publication:PR Newswire
Date:Oct 16, 1992
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