NEW YORK--(BUSINESS WIRE)--Fitch Ratings has downgraded the Long-Term Rating for the Industrial Development Authority of the City of Emporia, Virginia, industrial development revenue bonds (Toll VA III, L.P. Project), Series 1999 to 'A-' from 'A+' and affirmed the Short-Term Rating at '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) previously provided by Bank of America, N.A. (rated 'A+'/F1'/ Stable Outlook) with a substitute LOC to be issued by SunTrust Bank (rated 'A-'/F1'/Stable Outlook); and (ii) the mandatory tender of the bonds, which occurred on Sept. 21, 2016.
KEY RATING DRIVERS
The rating is based on the support provided by the substitute LOC issued by SunTrust Bank, which has an initial stated expiration date of May 21, 2021, 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 SunTrust Bank LOC provides full and sufficient coverage of principal plus an amount equal to 35 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 new Remarketing Agent for the bonds is SunTrust Robinson Humphrey, Inc.
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'.
Rating Criteria for Letter of Credit-Supported Bonds and Commercial Paper (pub. 05 Apr 2016)
U.S. Municipal Structured Finance Criteria (pub. 23 Feb 2015)
Dodd-Frank Rating Information Disclosure Form