Fitch Rates California Pollution Control Fin Auth VRDBs, Series 2010A & B 'A/F1'

NEW YORK--(BUSINESS WIRE)--Fitch Ratings assigns a rating of 'A/F1' to the $19,350,000 California Pollution Control Financing Authority variable rate demand solid waste disposal revenue bonds (Crown Disposal Company, Inc. Project), series 2010A and the $6,290,000 California Pollution Control Financing Authority variable rate demand solid waste disposal revenue bonds (South Bay Recycling, LLC Project), series 2010B. The ratings are based on the support provided by two separate irrevocable direct- pay letters of credit (LOCs) issued by Union Bank, N.A. (rated 'A/F1', Stable Outlook by Fitch).

The bank is obligated to make payments of principal of and interest on the bonds upon maturity, acceleration and redemption, as well as purchase price for tendered bonds. The ratings will expire upon the earliest of: (a) Sept. 7, 2015, the initial stated expiration date of the LOCs, unless such date is extended; (b) conversion to a term rate or index floating rate mode; (c) any prior termination of the LOCs; and (d) defeasance of the bonds. Each LOC provides full and sufficient coverage of principal plus an amount equal to 45 days of interest at a maximum rate of 12% based on a year of 365 days and purchase price for tendered bonds, while in the weekly rate mode. The Remarketing Agent for the bonds is Westhoff, Cone & Holmstedt. The bonds are expected to be delivered on or about Sept. 8, 2010.

The bonds initially bear interest at a weekly rate, but may be converted to a term rate or an index floating rate mode. While bonds bear interest in the weekly rate mode, interest payments are on the first Wednesday of each month, commencing Oct. 6, 2010. The trustee is obligated to make timely draws on the LOCs to pay principal, interest, and purchase price. Funds drawn under the LOCs are held uninvested, and are free from any lien prior to that of the bondholders.

Holders may tender their bonds on any business day, provided the trustee, who also acts as the tender agent, and the remarketing agent are given the requisite prior notice of the purchase. The bonds are subject to mandatory tender: (1) upon conversion of the interest rate; (2) upon substitution of the LOC; and (3) following receipt of written notice from the bank of an event of default under the reimbursement agreement, directing such mandatory tender. The bank has the option of directing an acceleration rather than a mandatory tender upon an event of default under the reimbursement agreement. The bonds shall be accelerated following the trustee's receipt of notice of non-reinstatement of the interest portion of the LOC. Expiration of a LOC without a renewal or provision of a substitute LOC results in a mandatory redemption of the bonds on a date not less than five calendar days preceding the then current expiration date of the respective LOC. Additional optional and mandatory redemption provisions also apply to the bonds. There are no provisions for the issuance of additional bonds.

The proceeds of the series 2010A bonds will be loaned by the authority to Crown Disposal Company, Inc., a California corporation to finance and refinance the purchase of rolling stock, vehicles, various waste handling equipment, and site improvements related to the upgrading and renovation of a material recovery facility in Sun Valley, CA and the renovation of various components of biomass energy facilities located in Lamont, CA. The proceeds of the series 2010B bonds will be loaned by the authority to South Bay Recycling, LLC, a California limited liability company to acquire rolling stock, vehicles and various waste handling equipment to be used in the acceptance, processing and sale of recycling materials from operations at The Shoreway Facility in San Carlos, CA.

Additional information is available at www.fitchratings.com.

Applicable criteria available on Fitch's website at www.fitchratings.com:

--'U.S. Municipal Structured Finance Rating Criteria' dated Aug. 16, 2010;

--'Rating Guidelines for Letter of Credit-Supported Bonds' dated April 29, 2009.

Related Research:

Rating Guidelines for Letter of Credit-Supported Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=435132

U.S. Municipal Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=548588

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