NEW YORK--(BUSINESS WIRE)--On the effective date of Aug. 31, 2016, Fitch Ratings will downgrade the ratings assigned to the Port of Portland, OR International Airport refunding revenue bonds, series eighteen (multimodal variable rate) subseries eighteen A and B to 'A/F1' from 'AA/F1+'. The Rating Outlook for the long-term rating is Stable. The rating action is in connection with: (i) the substitution of the irrevocable direct-pay letter of credit (LOC) provided by U.S. Bank, N.A. (rated 'AA/F1+', Stable Outlook) which currently provides support for the subseries eighteen A bonds and the substitution of the LOC provided by Wells Fargo Bank, National Association (rated 'AA/F1+', Stable Outlook) which currently provides support for the subseries eighteen B bonds with two separate substitute LOCs to be issued by Industrial and Commercial Bank of China (ICBC), New York Branch (rated 'A/F1', Stable Outlook); and (ii) the mandatory tender of the bonds, which will occur on Aug. 31, 2016.
KEY RATING DRIVERS
On the effective date, the ratings will be based on the support provided by the substitute LOCs issued by ICBC, which have an initial stated expiration date of Aug. 30, 2021, unless such date is extended or earlier terminated, while the bonds bear interest in the daily or weekly interest rate mode.
Pursuant to the substitute LOCs, 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 substitute LOCs provides full and sufficient coverage of principal plus an amount equal to 53 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 daily or weekly rate modes. The Remarketing Agents for the bonds are Goldman Sachs & Co and JPMorgan.
RATING SENSITIVITIES
The ratings are exclusively tied to the short and long-term ratings that Fitch maintains on the bank providing the substitute LOCs and will reflect all changes to that rating.
Additional information is available at www.fitchratings.com.
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