Fitch to Maintain Neg Watch on $112.63M NY Liberty Dev Corp, 2011A (WTC Proj-Towers 3-4)

NEW YORK--()--On the effective date of March 19, 2014, Fitch Ratings will maintain the Negative Watch on the long- and short-term 'AAA/F1+' ratings currently assigned to $112,630,000 New York Liberty Development Corporation (Issuer) multi-modal liberty revenue refunding bonds, series 2011A (World Trade Center Project- Towers 3-4) (2011A bonds).

This rating action is in connection with the March 19, 2014: 1) mandatory tender and reoffering of the 2011A bonds; 2) amendment and restatement of the bond trust indenture and loan agreement securing the 2011A bonds; and 3) redesignation of a portion of the principal amount ($170,000) of the 2011A bonds to the Issuer's multi-modal liberty revenue refunding bonds, series 2011B-4 (World Trade Center Project- Towers 3-4) (2011B-4 bonds), resulting in a decrease in the principal amount of 2011A bonds from $112,630,000 to $112,460,000. For information on the 2011B-1, 2011B-2, 2011B-3 and 2011B-4 bonds, see the press release of March 5, 2014.

The trustee, The Bank of New York Mellon, will hold proceeds of the remarketed 2011A bonds in the Project Fund under the bond indenture, which will be pledged only to holders of those bonds.

KEY RATING DRIVERS:

The 'AAA/F1+' rating (Rating Watch Negative on the long-term and short-term ratings) is based on: 1) 2011A bondholders' lien on the Project Fund; 2) the limitation on the investment of the Project Fund to U.S. Treasury obligations maturing on or prior to the dates needed to pay debt service on the 2011A bonds; 3) all payments of interest and purchase price on the 2011A bonds due on or before the term rate period mandatory tender date being made from the 2011A Project Fund or from proceeds of remarketing or refunding the bonds; and 4) representations that certified public accountants will verify that amounts deposited in the Project Fund will be sufficient to cover all payments of interest and purchase price of the 2011A bonds due on or before the term rate period mandatory tender date, without regard to investment income.

The 2011A bonds will be issued in a term interest rate mode, with the interest rate determined upon reoffering of the bonds. The first interest payment date for the 2011A bonds is Sept. 1, 2014. The Project Fund will be continuously invested in Demand Deposit State and Local Government Series (Daily Demand SLGs) of the U.S. Treasury, or for periods not exceeding 30 days, held as cash. In addition, an amount sufficient to pay interest on Sept. 1, 2014 will be held as cash. Upon receipt of an approving opinion of bond counsel, the Project Fund may also be invested in other U.S. Treasury obligations maturing prior to the date needed to pay bondholders.

The 2011A bonds will be subject to mandatory tender on Dec. 17, 2014. However, if federal borrowing reaches its statutory debt limit thereby causing the Daily Demand SLGs to be converted by the U.S. Treasury into special 90 day certificate of indebtedness SLGs (90 day SLGs) maturing after Dec. 17, 2014, and the series 2011A bonds cannot be remarketed on Dec. 17, 2014, the mandatory tender date will occur within 30 days of maturity of the 90 day SLGs, but not later than March 19, 2015. In addition, the bonds may be subject to mandatory tender prior to Dec. 17, 2014 if the Daily Demand SLGs are converted into 90 day SLGs maturing more than 30 days prior to Dec. 17, 2014 and federal borrowing is still at its statutory debt limit upon maturity of the 90 day SLGs and for five days thereafter, bonds will be subject to mandatory tender within 20 days of the maturity of the 90 day SLGs. The rating will expire upon mandatory tender and payment of the purchase price or earlier redemption of the 2011A bonds.

Proceeds of the 2011A bonds will be used for costs of construction of Tower 3 or Tower 4 at the World Trade Center site in New York, New York. The 2011A bonds are expected to be available for delivery on or about March 19, 2014.

RATING SENSITIVITES:

The rating is tied to the U.S. sovereign creditworthiness and will reflect all changes to that rating.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Criteria', Feb. 24, 2014.

Applicable Criteria and Related Research:

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736618

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Contacts

Fitch Ratings
Primary Analyst
Janet Rosen, +1-312-368-3172
Analytical Consultant
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Trudy Zibit, +1-212-908-0689
or
Committee Chairperson:
Joseph Staffa, +1-212-908-0829
Senior Director
or
Media Relations
Elizabeth Fogerty, +1 212- 908-0526
elizabeth.fogerty@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Janet Rosen, +1-312-368-3172
Analytical Consultant
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Trudy Zibit, +1-212-908-0689
or
Committee Chairperson:
Joseph Staffa, +1-212-908-0829
Senior Director
or
Media Relations
Elizabeth Fogerty, +1 212- 908-0526
elizabeth.fogerty@fitchratings.com