Fitch Rates Eastern Municipal Water District, CA's 2014A Bank Bonds 'AA'; Outlook Stable

SAN FRANCISCO--()--Fitch Ratings assigns an 'AA' rating to $48.6 million of bank bonds associated with Eastern Municipal Water District, California's (the district) series 2014A variable-rate subordinate water and sewer revenue refunding bonds (the bonds), should the bonds ever be held by the liquidity provider.

The district expects to execute a standby bond purchase agreement (SBPA) effective June 11, 2014 with Wells Fargo Bank, National Association (the bank; rated 'AA-/F1+'; Outlook Stable by Fitch) providing liquidity support for the bonds. The bank bond rating is assigned to the bonds, but will only become applicable if they cannot be remarketed and are purchased by the bank.

The 'AA' bank bond rating is based on the district's long term credit quality and sensitive to changes in the long-term rating. For more information on the long-term rating, see the press release dated May 28, 2014 entitled 'Fitch Affirms Eastern Municipal Water District, CA's Sr. Revs at 'AA+'; Outlook Stable' available on Fitch's website at www.fitchratings.com.

Based on a review of the terms governing bank bonds specified in the SBPA, Fitch believes that the incremental risk associated with bank bonds does not have a material impact on the district's long-term credit rating. Legal provisions are standard with a five-year amortization period beginning after 180 days and a maximum interest rate of 12% on any bank bonds.

The Rating Outlook is Stable.

Additional information is available at 'www.fitchratings.com'

Applicable Criteria and Related Research:

--'Revenue-Supported Rating Criteria' (June 3, 2013);

--'U.S. Water and Sewer Revenue Bond Rating Criteria' (July 31, 2013);

--'Rating U.S. Public Finance Short-Term Debt' (July 31, 2013).

Applicable Criteria and Related Research:

Revenue-Supported Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709499

U.S. Water and Sewer Revenue Bond Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715275

Rating U.S. Public Finance Short-Term Debt

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724680

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=832397

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Contacts

Primary Analyst
Andrew Ward
Director
+1-415-732-5617
Fitch Ratings, Inc.
650 California Street, 4th Floor
San Francisco, CA 94108
or
Secondary Analyst
Matthew Reilly
Director
+1-415-732-7572
or
Committee Chairperson
Douglas Scott
Managing Director
+1-512-215-3725
or
Media Relations
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com

Sharing

Contacts

Primary Analyst
Andrew Ward
Director
+1-415-732-5617
Fitch Ratings, Inc.
650 California Street, 4th Floor
San Francisco, CA 94108
or
Secondary Analyst
Matthew Reilly
Director
+1-415-732-7572
or
Committee Chairperson
Douglas Scott
Managing Director
+1-512-215-3725
or
Media Relations
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com