Fitch Rates $1.3B NJ Econ Dev Auth Bonds 'AAApre'; Outlook Stable

NEW YORK--()--Fitch Ratings has assigned a rating of 'AAApre', Stable Outlook to the $1,314,690,000 New Jersey Economic Development Authority (NJEDA) school facilities construction bonds refunded on May 6, 2014 with proceeds of the NJEDA's school facilities construction refunding bonds consisting of:

--$553,845,000 2014 series PP;

--$197,140,000 2014 series SS;

--$615,465,000 2014 series QQ (Federally Taxable);

--$52,860,000 2014 series TT (Federally Taxable).

KEY RATING DRIVERS:

The 'AAApre' Stable Outlook is based on the pledge of securities in the escrow deposit funds securing the bonds and reflects the lien of the refunded bondholders on the escrow trust funds and that all amounts have been invested in direct non-callable obligations of the United States. The U.S. full faith and credit is currently rated 'AAA', Stable Outlook by Fitch.

The bonds were refunded with proceeds of the NJEDA's school facilities construction refunding bonds. The ratings apply to the bonds listed by CUSIP numbers, below.

Pursuant to two separate irrevocable escrow deposit agreements, U.S. Bank National Association, as escrow agent, holds two separate special irrevocable escrow funds, in trust for the benefit of the related refunded bondholders. One escrow deposit agreement and escrow deposit fund secure bonds refunded with the proceeds of the NJEDA's series PP and SS bonds, while the other escrow deposit agreement and escrow deposit fund secures bonds refunded with proceeds of the NJEDA's series QQ and TT bonds. All cash and securities held in each respective fund are pledged irrevocably to the payment when due of principal and interest on the refunded bonds. In the future, any substitute or additional investments may also include other non-callable direct general obligations of the United States, non-callable U.S. agency obligations guaranteed by the U.S. and pre-refunded municipal obligations that have been rated 'AAApre' by Fitch and are not callable prior to the date needed for debt service on the NJEDA's refunded bonds.

Samuel Klein and Company verified the mathematical accuracy of computations relating to the adequacy of income from escrowed funds and securities to pay debt service requirements of the refunded bonds. These computations were contained in schedules provided to them by Bank of America Merrill Lynch, underwriter for the refunding bonds. According to the Samuel Klein verification report, the anticipated receipts from the SLGs and cash deposited in the escrow account will be sufficient to pay when due the principal and interest on the refunded bonds. Prior to accepting substitute or additional investment securities or disbursing funds to the NJEDA, the escrow agent must receive a new report verifying the continued sufficiency of escrowed funds to meet all future payments of principal and interest on the refunded bonds.

RATING SENSITIVITIES:

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

The 'AAApre' rating applies to the bonds with the following CUSIP numbers:

645916K48

645916K55

645916K63

645916K71

645918LN1

645918LP6

6459186U2

645918LY7

645918LZ4

645918MA8

645916Y68

6459186W8

645916Y84

645916Y92

645916Z26

645916Z34

6459162T3

6459164U8

6459164V6

6459164W4

6459164X2

6459164Y0

645918AQ6

645918AR4

645918CL5

645918CM3

645918MJ9

645918MK6

645918MS9

645918MT7

6459186Y4

645918HD8

645918HE6

645918HF3

645918HG1

6459187A5

645918HK2

645918HP1

6459187B3

6459187C1

645918PD9

645918PC1

645918PE7

645918PF4

645918PG2

645918PH0

6459187G2

6459187H0

6459187J6

6459187K3

6459187L1

645918RJ4

645918RH8

645918RL9

645918RK1

645918RN5

645918RM7

645918RQ8

645918RP0

6459187S6

645918WE9

645918WF6

645918WZ2

645918XB4

645918XC2

645918UQ4

645918UR2

645918US0

645918UU5

6459187U1

6459187V9

6459187W7

645918UZ4

645918X24

645918ZL0

6459188A4

6459188B2

645918A86

645918A94

645918D42

6459188E6

645918L50

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

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

--'Guidelines for Rating Prerefunded U.S. Municipal Bonds', December 2, 2013.

Applicable Criteria and Related Research:

Guidelines for Rating Prerefunded U.S. Municipal Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724818

U.S. Municipal Structured Finance Criteria

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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=830192

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Contacts

Fitch Ratings
Primary Analyst
Kasia Reed
Consulting Analyst
+1-212-908-0500
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Trudy Zibit
Managing Director
+1-212-908-0689
or
Committee Chairperson
Mario Civico
Senior Director
+1-212-908-0796
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Kasia Reed
Consulting Analyst
+1-212-908-0500
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Trudy Zibit
Managing Director
+1-212-908-0689
or
Committee Chairperson
Mario Civico
Senior Director
+1-212-908-0796
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com