Fitch Downgrades S-T Rating to 'F1' on Port of Oakland, CA Commercial Paper Notes Series A, B and C

NEW YORK--()--Fitch Ratings has downgraded the short-term rating assigned to the Port of Oakland, California Commercial Paper Notes Series A (Exempt Facility), Series B (Governmental) and Series C (Taxable) (the notes) to 'F1' from 'F1+'. A maximum of $150,000,000 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 irrevocable direct-pay letter of credit (LOC) provided by Wells Fargo Bank, National Association (rated 'AA/F1+', Stable Outlook) supporting the notes, with a LOC provided by Bank of America, National Association, (BANA; rated 'A+/F1', Stable Outlook) and (ii) the reoffering of the notes.

KEY RATING DRIVERS

The 'F1' short-term rating on the notes is based on the support of the LOC issued by BANA which has a stated expiration date of June 30, 2019, unless extended or earlier terminated. The BANA substitute LOC provides coverage for the principal amount of the notes and interest on the maturity dates of the notes.

U.S. Bank National Association will continue 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.

The Series A and B notes will be issued at par, with interest due at maturity and the Series C notes will be issued at a discount. Following the occurrence of an event of default under the LOC, BANA may direct the IPA to immediately stop the issuance of any additional notes. The bank will also notify the IPA that the stated amount of the LOC shall be permanently reduced to the principal amount of notes then outstanding and interest due thereon, and shall be further permanently reduced following the maturity of any such notes. In such event, the substitute LOC will expire after all the notes supported by such LOC mature and have been paid from funds drawn on the substitute LOC. In addition, BANA may issue a final drawing notice directing the IPA to draw on its LOC for the principal of and interest due on all notes outstanding in which case the LOC will expire on the earlier of (A) the 15th calendar day (or if such date is not a Business Day, the immediately succeeding Business Day) after the date on which the IPA received the final drawing notice and (B) the date on which the Drawing resulting from the delivery of the final drawing notice is honored. Goldman Sachs & Co. continues as the dealer for the notes.

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

Rating Criteria for Letter of Credit-Supported Bonds and Commercial Paper (pub. 05 Apr 2016)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=878782

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=1005958

Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1005958

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

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Contacts

Fitch Ratings
Primary Analyst:
Linda Friedman, +1-212-908-0727
Senior Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst:
Richard Park, +1-212-908-0289
Director
or
Committee Chairperson:
Mario Civico, +1-212-908-0796
Senior Director
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526
New York
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst:
Linda Friedman, +1-212-908-0727
Senior Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst:
Richard Park, +1-212-908-0289
Director
or
Committee Chairperson:
Mario Civico, +1-212-908-0796
Senior Director
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526
New York
elizabeth.fogerty@fitchratings.com