CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed both outstanding classes of the State of Hawaii Department of Business, Economic Development, and Tourism Green Energy Market Securitization Bonds 2014 Series A, as follows:
--Class A-1 notes at 'AAAsf'; Outlook Stable;
--Class A-2 notes at 'AAAsf'; Outlook Stable.
KEY RATING DRIVERS
The transaction is performing within expectations, with levels of outstanding principal in-line with their targeted amortization schedules and no shortfalls in the capital subaccount. Additionally, the true-up mechanism continues to provide adequate credit support for all outstanding classes.
As part of its initial rating sensitivity, Fitch conducted a break the bond case which provides an alternative means by which to measure the potential effects of rapid, significant declines in customer count while capping the residential green infrastructure fee (GIF) at 20% of the total residential customer bill. This analysis determines the maximum level of customer decline that would cause a default in required payments on the securitization or cause the GIF to exceed 20% of the total residual customer bill. Despite this severe decline, due to the true-up mechanism, GIFs are able to pay all debt service by the legal final maturity date.
For further detail on the rating sensitivity analysis for Utility Tariff Bonds, please refer to Fitch's criteria titled 'Rating Criteria for U.S. Utility Tariff Bonds' available at 'www.fitchratings.com'.
USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10
No third party due diligence was provided or reviewed in relation to this rating action.
REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS
A description of the transaction's representations, warranties and enforcement mechanisms (RW&Es) that are disclosed in the offering document and which relate to the underlying asset pool is available by accessing the appendix referenced under "Related Research" below. The appendix also contains a comparison of these RW&Es to those Fitch considers typical for the asset class as detailed in the Special Report titled 'Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions,' dated May 31, 2016.
Additional information is available at www.fitchratings.com.
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 01 Sep 2016)
Global Structured Finance Rating Criteria (pub. 27 Jun 2016)
Rating Criteria for U.S. Utility Tariff Bonds (pub. 21 Dec 2015)
State of Hawaii Department of Business, Economic Development and Tourism Green Energy Market Securitization Bonds 2014 Series A -- Appendix
Dodd-Frank Rating Information Disclosure Form