Fitch to Upgrade S-T Rating to 'F1+' on Boston Water & Sewer Commission CP Notes Series A

NEW YORK--()--On the effective date of Dec. 11, 2014, Fitch Ratings will upgrade the short-term rating to 'F1+' from 'F1' for the Boston Water and Sewer Commission tax-exempt commercial paper bond anticipation notes, series A (notes). A maximum of $90,000,000 aggregate principal amount of authorized notes may be outstanding at any given time.

The rating action is in connection with (i) the substitution of the current irrevocable direct-pay letter of credit (LOC) provided by Bank of America, N.A. (rated 'A/F1', Negative Outlook) supporting the notes, with a LOC to be provided by State Street Bank and Trust Company (State Street; rated 'AA-/F1+', Stable Outlook); and (ii) the reoffering of the notes.

KEY RATING DRIVERS:

On the effective date, the rating will be upgraded to 'F1+' based on the support provided by an irrevocable direct-pay LOC to be provided by State Street. The State Street substitute LOC provides coverage for the principal amount of the notes and interest on the maturity dates of the notes.

The short-term rating on the notes will expire on the earlier of Dec. 10, 2019, the expiration date of the substitute LOC, unless such date is extended, or upon any prior termination of the substitute LOC.

U.S. Bank National Association will act as the as the Issuing and Paying Agent (IPA) for the notes, and as IPA is directed to request an advance under the LOC to pay principal and interest on maturing notes. The substitute LOC provides sufficient coverage for the principal amount of notes and 270 days of interest calculated at 12% based upon a 365 day year.

Notes will be issued at par with interest due at maturity. Following the occurrence of an event of default under the LOC, State Street may direct the IPA to either (i) issue a no issuance notice whereby the Stated Amount of the LOC will be reduced to the amount of notes outstanding and the interest payable thereon at maturity of such notes and reduce the Stated Amount of the LOC as the then outstanding notes mature or (ii) issue the Final Drawing Notice (the effect of which is to cause the Termination Date of the LOC to occur on the earlier of the 15th day after the date of receipt thereof by the IPA and the date on which a final drawing notice is honored by the bank).

The dealer for the notes is Merrill Lynch, Pierce, Fenner & Smith Inc.

RATING SENSITIVITIES:

The rating is exclusively tied to the short-term rating that Fitch maintains on the substitute bank providing the LOC 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;

--'Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support', Jan. 27, 2014.

Applicable Criteria and Related Research:

U.S. Municipal Structured Finance Criteria

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

Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=730736

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Contacts

Fitch Ratings
Primary Analyst
Mario Civico
Senior Director
+1-212-908-0796
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Richard Park
Director
+1-212-908-0289
or
Committee Chairperson
Joseph Staffa
Senior Director
+1-212-908-0829
or
Media Relations
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Mario Civico
Senior Director
+1-212-908-0796
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Richard Park
Director
+1-212-908-0289
or
Committee Chairperson
Joseph Staffa
Senior Director
+1-212-908-0829
or
Media Relations
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com