NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the short-term rating at 'F1+' assigned to the $96,785,000 (currently outstanding, with original principal amount of $123,185,000) Nassau County Interim Finance Authority (A Public Benefit Corporation of The State of New York) Sales Tax Secured Variable Rate Bonds Series 2008D-1.
The short-term rating action is in connection with: (i) the substitution of the liquidity support provided by The Bank of New York Mellon (rated 'AA/F1+'; Stable Outlook) in the form of a Standby Bond Purchase Agreement (SBPA), with a substitute SBPA issued by BMO Harris Bank N.A. (rated 'AA-/F1+'); and (ii) the mandatory tender of the bonds.
KEY RATING DRIVERS
The short-term 'F1+' rating is based on the liquidity support provided by BMO Harris Bank N.A., in the form of a substitute SBPA, which has a stated expiration date of Sept. 15, 2017, unless extended or earlier terminated, during the daily, weekly and monthly interest rate modes. The long-term rating continues to be based on the rating assigned to NIFA's sales tax secured bonds. The Rating Outlook is Stable, for the long-term rating. For more information on the long-term rating, see the press release dated Sept. 30, 2015, available 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 calculated at a maximum rate of 15%, based on a year of 365 days for tendered bonds during the daily, weekly and monthly 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 Sept. 15, 2017, the stated expiration date, unless such date is extended; upon conversion to a mode not covered by the SBPA; 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 the bonds which result in an automatic and immediate termination. A mandatory tender of the bonds has occurred in connection with substitution of the SBPA. The remarketing agent for the bonds is Blaylock Robert Van LLC.
The short-term rating reflects 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. The long-term rating is exclusively tied to the creditworthiness of the bonds and will reflect all changes to that rating.
Additional information is available at www.fitchratings.com.
Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support (pub. 22 Jan 2015)
U.S. Municipal Structured Finance Criteria (pub. 23 Feb 2015)
Dodd-Frank Rating Information Disclosure Form