NEW YORK--(BUSINESS WIRE)--(This is a correction to a release published on Nov. 2, 2015. It corrects the long-term rating for U.S. Bank, National Association to 'AA', which was stated as 'AA-' in the original release).
Fitch Ratings has upgraded the long-term rating to 'AA' from 'AA-' and affirms the short-term 'F1+' rating assigned to the $61,930,000 Rhode Island Health and Educational Building Corporation higher education facility revenue refunding bonds (Rhode Island School of Design Issue), Series 2008A. The Rating Outlook is Stable for the long-term rating. The rating action is in connection with the substitution of the irrevocable direct-pay letter of credit (LOC) previously provided by JPMorgan Chase Bank, N.A. (rated 'AA-/F1+', Stable Outlook with a substitute LOC issued by U.S. Bank, National Association (rated 'AA/F1+', Stable Outlook). The bonds were not subject to mandatory tender.
KEY RATING DRIVERS:
The long-term 'AA' rating is based on the higher of the underlying long-term rating assigned to the bonds by Fitch, which is currently 'A+', Stable Outlook), and the long-term rating assigned by Fitch to U.S. Bank, National Association (rated 'AA/F1+', Stable Outlook), the bank providing the irrevocable direct-pay letter of credit (LOC) securing the bonds, which has an initial stated expiration date of Nov. 2, 2018, unless extended or earlier terminated, during the weekly and monthly interest rate mode only. The short-term 'F1+' rating is based solely on the LOC. For information about the underlying credit rating see the press release 'Fitch Affirms Rhode Island School of Design Revs at 'A+', Outlook Stable', dated May 29, 2014 available at 'www.fitchratings.com'.
Pursuant to the substitute LOC, the bank is obligated to make regularly scheduled payments of principal of and interest on the bonds in addition to payments due upon maturity, acceleration and redemption, as well as purchase price for tendered bonds. Additionally, the bond obligor is in the flow of funds to make timely payments of principal and interest due upon maturity, acceleration and redemption.
The U.S. Bank, National Association substitute LOC provides full and sufficient coverage of principal plus an amount equal to 45 days of interest at a maximum rate of 12% based on a year of 365 days and purchase price for tendered bonds, while in the weekly and monthly rate modes. On the effective date, the Remarketing Agent for the bonds will be U.S. Bancorp.
The long-term rating is tied to the Fitch long-term rating assigned to the bond obligor and the long-term rating that Fitch maintains on the substitute bank providing the LOC. Changes to one or both of these ratings may affect the long-term rating assigned to the bonds.
The short-term rating is exclusively tied to the short-term rating that Fitch maintains on the bank providing the substitute LOC and will reflect all changes to that rating.
Additional information is available at www.fitchratings.com.
Rating Guidelines for Letter of Credit-Supported Bonds and Commercial Paper (pub. 21 May 2015)
U.S. Municipal Structured Finance Criteria (pub. 23 Feb 2015)
Dodd-Frank Rating Information Disclosure Form