NEW YORK--(BUSINESS WIRE)--On the effective date of Jan. 22, 2013, Fitch Ratings will confirm the 'F1' short-term rating assigned to the Sunshine State Governmental Financing Commission (the issuer) Commercial Paper Revenue Notes, Series H (Orlando Program) (Callable) (the callable CP notes). The rating action is in connection with (i) amendments to the program documents that allow for the issuance and sale of CP notes with a call option and (ii) the reoffering of the above-referenced notes as callable CP notes, subject to redemption prior to maturity.
The 'F1' rating on the callable CP notes will continue to be based on the support of both the City of Orlando, Florida (the City) and a liquidity facility in the form of the Second Amended and Restated Commercial Paper Purchase Agreement (CPPA) provided by JPMorgan Chase Bank, National Association (JPMorgan, currently rated 'A+/F1', Stable Outlook by Fitch). The City covenants to budget and appropriate principal and interest loan repayments from available non-ad valorem revenues. Fitch rates long-term obligations secured by this covenant 'AA+', Stable Outlook, and the City's implied general obligation rating is 'AAA', Stable Outlook. (For more information, see the press release 'Fitch Rates Orlando, FL's $9.5MM Capital Improvement Bonds 'AA+'; Outlook Stable' dated Feb. 27, 2012).
On Jan. 22, 2013, the effective date of the amendments and reoffering, the issuer will be authorized to issue CP notes callable during a period commencing on the 35th day prior to the maturity date. Each callable CP Note must mature at least 38 days but not more than 270 days from its date of issuance, and not less than five days prior to the expiration date of the CPPA. The available commitment amount of the liquidity facility shall initially be $115,740,000. Deutsche Bank Trust Company Americas, as Issuing and Paying Agent (I&PA) is instructed not to issue callable CP notes that would exceed the amount available under the liquidity facility. The maximum interest rate on the callable CP notes is 12%.
The I&PA will continue to draw on the liquidity facility to make payments of the principal of the series H Notes at maturity, if there are insufficient funds from the City's principal loan repayments and the proceeds of rollover callable CP notes. The principal amount due on the redemption date of callable CP notes will be paid only from the proceeds of rollover notes. Interest due upon maturity or early redemption of callable CP notes is provided from the City's regularly scheduled loan repayments or, if necessary, from an interest reserve account equal to 52 days of interest on the original principal amount of the loan, calculated at a rate of 12% per annum. The City is required to maintain the interest reserve amounts throughout the term of the loan; the reserve is currently fully funded. In the event sufficient funds for the payment of principal and accrued interest are not available on the specified redemption date, the callable CP notes are not required to be redeemed and the redemption is cancelled.
The rating will expire upon the stated expiration date of the Agreement, Feb. 15, 2016, or upon any prior termination of this agreement in accordance with its terms. The dealers for the callable CP notes are J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.
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 Criteria', Feb. 28, 2012;
-- 'Rating Guidelines for Commercial Paper Note Programs issued with External Support', March 19, 2012.
Applicable Criteria and Related Research:
U.S. Municipal Structured Finance Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=672570
Rating Guidelines for Commercial Paper Note Programs Issued with
External Support
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=674368
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