Fitch Rates Garland, TX GO Commercial Paper Notes Series 2012 'F1+'

NEW YORK--(BUSINESS WIRE)--Fitch Ratings assigns a rating of 'F1+' to the $50,000,000 city of Garland, Texas, general obligation commercial paper notes, series 2012 (the notes).

The 'F1+' rating on the notes is based on the liquidity support provided by Royal Bank of Canada (RBC; rated 'AA/F1+, Stable Outlook by Fitch) in the form of a Credit Agreement. The rating on the notes will expire on the earlier of Feb. 23, 2015, the expiration date of the Credit Agreement, unless such date is extended, or upon any prior termination of the Credit Agreement.

Deutsche Bank National Trust as the Issuing and Paying Agent (IPA) for the notes is directed to request an advance under the Credit Agreement whenever proceeds of the sale of rollover notes are insufficient to pay maturing notes. The Credit Agreement provides coverage for $55,547,946 representing $50,000,000 available to pay the principal amount of notes and $5,547,946 available to pay interest on the notes. The closing is expected to occur on or about Feb. 23, 2012.

All notes will be issued at par, with interest due at maturity. Upon the occurrence of an event of default under the Credit Agreement, RBC may (i) deliver a 'No-Issuance Notice' directing the IPA to immediately stop the issuance of any additional notes and directing the IPA to effect payment on the notes as they mature or (ii) RBC may deliver to the city and the IPA a Final Drawing Notice stating that an event of default has occurred, directing that no additional notes be issued and stating that the Commitment and the Bank's obligation to make advances will terminate upon the close of business on the 10th day following the giving of notice and instructing the IPA to draw in full for all amounts outstanding. In addition, the Credit Agreement may be terminated at the Bank's option upon the occurrence of specified termination events. The 'F1+' rating will expire on the expiration or prior termination of the RBC Credit Agreement. The rating may be adjusted upward or downward in conjunction with the long-term rating of general obligation bonds issued by the city of Garland, Texas or the short-term rating of the bank. Barclays Capital is the dealer for the notes.

Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Rating Criteria', April 25, 2011;

--'Rating Guidelines for Commercial Paper Note Programs Issued with External Support', April 11, 2011.

Applicable Criteria and Related Research:

U.S. Municipal Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=624129

Rating Guidelines for Commercial Paper Note Programs Issued with External Support

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=619027

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