NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms the 'F1+' short-term rating assigned to the New York City Transitional Finance Authority future tax secured tax-exempt subordinate bonds fiscal 2013 series A subseries A-6 and subseries A-7 (the bonds). The rating action is in connection with the substitution of the liquidity facility currently provided by California State Teacher's Retirement System (CaLSTRS rated 'AA+/F1+'; Stable Outlook) for the subseries A-6 bonds and the extension of the existing liquidity facility currently provided by State Street Bank and Trust Company (State Street, rated 'AA/F1+', Stable Outlook) for the subseries A-7 bonds in the form of a SBPA to be provided by State Street for both series of bonds.
KEY RATING DRIVERS
The short-term 'F1+' rating assigned to the series 2013 A-6 and A-7 bonds is based on the liquidity support provided State Street, in the form of a substitute SBPA, which has a stated expiration date of Aug. 19, 2020, unless extended or earlier terminated, during the daily rate, two-day rate and the weekly rate modes. The long-term 'AAA', Stable Outlook rating currently assigned to the bonds continues to be based on the rating assigned by Fitch to the future tax secured bonds issued by the New York City Transitional Finance Authority. For more information on the long-term rating of New York City Transitional Finance Authority, see the press release dated April 9, 2015 on Fitch's website at www.fitchratings.com.
The substitute SBPA provides for the payment of the principal component of purchase price plus an amount equal to 35 days of interest at the maximum rate of 9%, based on a year of 365 days for tendered bonds during the daily rate, two-day rate and weekly rate modes in the event that the proceeds of a remarketing of the bonds are insufficient to pay the purchase price following an optional or mandatory tender. The substitute SBPA will expire on Aug. 19, 2020, unless such date is extended, upon conversion to the earlier of: April 7, 2017, the scheduled expiration date, unless such date is extended; conversion to a mode to other than a daily rate, two-day rate and weekly rate modes; or upon the occurrence of certain events of default which result in a mandatory tender or other events of default related to the credit of New York City Transitional Finance Authority which result in an automatic and immediate termination. The remarketing agent for the bonds is US Bancorp.
RATING SENSITIVITIES
The short-term ratings reflect the short-term rating that Fitch maintains on the bank providing liquidity support, and will be adjusted upward or downward in conjunction with the short-term rating of the bank and, in some cases, the long-term rating of the bonds.
Additional information is available on www.fitchratings.com
Applicable Criteria
Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support (pub. 22 Jan 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=856189
U.S. Municipal Structured Finance Criteria (pub. 23 Feb 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=862222
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=990079
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=990079
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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