Fitch Downgrades L-T & S-T Rtg on CPCFA (Orange Ave Disposal), Ser 2002A to 'A/F1'

NEW YORK--()--Fitch Ratings has downgraded the long-term and short-term ratings to 'A/F1' from 'AA+/F1+' assigned to the California Pollution Control Financing Authority (CPCFA) variable rate demand solid disposal revenue bonds (Orange Avenue Disposal Company, Inc. Project), series 2002A. The Rating Outlook for the long-term rating is Stable. The rating action is in connection with: (i) the termination of the Confirming Letter of Credit provided by California State Teacher's Retirement System (CalSTRS, rated 'AA+/F1+', Stable Outlook),(ii) the substitution of the irrevocable direct-pay letter of credit (LOC) previously provided by MUFG Union Bank, N.A. (rated 'A/F1', Stable Outlook) with a substitute LOC to be issued by MUFG Union Bank, N.A.; and (iii) the mandatory tender of the bonds, which occurred on Nov. 4, 2015.

KEY RATING DRIVERS

The rating is based on the support provided by the substitute LOC issued by MUFG Union Bank, N.A., which has an initial stated expiration date of Dec. 1, 2020, unless such date is extended or earlier terminated, while the bonds are in the weekly interest rate mode only.

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. The MUFG Union Bank, N.A. 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 rate mode. The Remarketing Agent for the bonds is Westoff, Cone & Holmstedt.

RATING SENSITIVITIES

The rating is exclusively tied to the short- and long-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.

Applicable Criteria

Rating Guidelines for Letter of Credit-Supported Bonds and Commercial Paper (pub. 21 May 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=866152

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=993419

Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=993419

Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst:
Mario Civico, +1-212-908-0796
Senior Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst:
Kasia Reed, +1-212-908-0500 x5065
Analytical Consultant
or
Committee Chairperson:
Linda Friedman, +1-212-908-0726
Senior Director
or
Media Relations:
Sandro Scenga, +1-212-908-0278
New York
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst:
Mario Civico, +1-212-908-0796
Senior Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst:
Kasia Reed, +1-212-908-0500 x5065
Analytical Consultant
or
Committee Chairperson:
Linda Friedman, +1-212-908-0726
Senior Director
or
Media Relations:
Sandro Scenga, +1-212-908-0278
New York
sandro.scenga@fitchratings.com