NEW YORK--(BUSINESS WIRE)--On the effective date of March 12, 2014, Fitch Ratings will confirm the 'A+/F1', Stable Outlook, rating for the city of Middletown, Ohio (Atrium Medical Center Obligated Group) hospital facilities revenue bonds $56 million ($48,125,000 currently outstanding) series 2008A and $55 million series 2008B ($47,825,000 currently outstanding).
The rating action is in connection with the substitution of the irrevocable direct-pay letters of credit (LOCs) previously provided by JPMorgan Chase Bank, N.A. (currently rated 'A+/F1', Stable Outlook by Fitch) with two separate substitute LOCs issued by PNC Bank, National Association (PNC, currently rated 'A+/F1', Stable Outlook) and the March 12, 2014, mandatory tender and remarketing of the bonds.
KEY RATING DRIVERS:
The ratings are based on the support provided by the substitute LOCs issued by PNC.
Pursuant to the substitute LOCs, the bank is obligated to make regularly scheduled payments of principal of and interest on the bonds in addition to payments due upon maturity and redemption, as well as purchase price for tendered bonds. The rating will expire upon the earliest of: (a) March 12, 2019, the initial stated expiration date of the substitute LOCs, unless such date is extended; (b) conversion to a mode other than the daily or weekly rate; (c) any prior termination of the substitute LOCs; and (d) defeasance of the bonds. The PNC substitute LOCs provide full and sufficient coverage of principal plus an amount equal to 34 days of interest at a maximum rate of 15% based on a year of 365 days and purchase price for tendered bonds, while in the daily and weekly rate mode. Barclays will replace Merrill Lynch as remarketing agent for the bonds.
The rating is exclusively tied to the short- and long-term rating that Fitch maintains on the bank providing the substitute LOC and will reflect all changes to that rating.
Applicable criteria available on Fitch's website at www.fitchratings.com:
'U.S. Municipal Structured Finance Criteria", Feb. 24, 2014;
'Rating Guidelines for Letter of Credit-Supported Bonds", June 14, 2013.
Applicable Criteria and Related Research:
Rating Guidelines for Letter of Credit-Supported Bonds
U.S. Municipal Structured Finance Criteria