2008-05-22 23:30:40 -
- Fitch Ratings has assigned 'AA+/F1+' ratings to the Central Utah Water Conservancy District's (the District) $148,800,000 general obligation (GO) limited tax refunding bonds, series 2008A. The long-term 'AA+' rating on the bonds is based on the rating assigned by Fitch to the District's GO bonds. The Rating Outlook is Stable.
The 'F1+' short-term rating is based on liquidity
support provided by Landesbank Hessen Thuringen, acting through its New York Branch in the form of a Standby Bond Purchase Agreement (SBPA). Fitch has also affirmed the long-term 'AA+' rating on the district's outstanding GO (limited tax) refunding bonds and GO fixed-rate serial bonds.
The long-term 'AA+' rating is based on the district's status as a long-established entity with strong management and extensive experience in working closely with federal and state governments to construct, operate, and manage an essential service to a growing population across ten counties. Although the GO debt amortization is very slow, debt levels are low, and projected debt service coverage is strong. For debt service coverage purposes, the district is unlikely to need to levy its full tax rate capacity or to draw upon its debt service reserve, given its history of transferring significant annual surplus monies to its Capital Projects Fund.
The SBPA provides for the payment of the purchase price of tendered Bonds bearing interest in the weekly rate mode in the event the proceeds of a remarketing of the Bonds are insufficient to pay the purchase price. The SBPA is sized to provide for the entire principal amount of the bonds, plus interest coverage of 35 days calculated at a maximum interest rate of 12%, based on a year of 365 days. The SBPA will expire on May 27, 2011 unless such date is extended, or upon the occurrence of other events of termination, all in accordance with its terms. Fitch's short-term rating expires on the expiration or termination of the SBPA. George K. Baum & Company is the underwriter and remarketing agent for the Bonds. The Bonds are expected to be available for delivery on or about May 29, 2008.
The Bonds will be issued in the weekly interest rate mode and may be converted to a daily rate, a commercial paper rate, a long term rate, or a fixed-rate mode. While the bonds bear interest in the weekly rate mode interest will be paid on the first business day of each calendar month. Holders of bonds bearing interest in the weekly rate mode may tender their Bonds for purchase on any business day with prior notice.
Bonds are subject to purchase in lieu of redemptions (equivalent to Mandatory Tender): (1) on the effective date of any change in the interest rate mode; (2) on the business day prior to any expiration, termination or substitution of the SBPA; (3) on the first day of any new long-term period; and (4) on each interest payment date while the bonds are in Commercial Paper mode. Optional and mandatory redemption provisions also apply to the Bonds pursuant to the terms of the documents
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Fitch Ratings, New York
Linda Friedman, 212-908-0727 (short-term rating)
Alan Gibson, 415-732-1752, San Francisco
(long-term rating of the Central
Utah Water Conservancy District)
or
Media Relations:
Cindy Stoller, 212-908-0526
