NEW YORK--(BUSINESS WIRE)--On the effective date of Feb. 19, 2014, Fitch Ratings will confirm the 'AA-/F1+', Stable Outlook, rating for the $50 million Illinois Finance Authority variable rate demand revenue bonds (Elmhurst Memorial Healthcare) series 2008D.
The rating action is in connection with the substitution of the irrevocable direct-pay letter of credit (LOC) previously provided by The Northern Trust Company ('AA-/F1+', Stable Outlook) with a substitute LOC issued by BMO Harris Bank ('AA-/F1+', Stable Outlook) and the Feb. 19, 2014, mandatory tender and remarketing of the bonds.
KEY RATING DRIVERS:
The long-term rating will be based on the
higher of the underlying long-term rating assigned to the bonds by Fitch
(currently rated 'BBB', Stable Outlook), and the long-term rating
assigned by Fitch to the bank providing the LOC securing the bonds. The
short-term rating is based solely on the LOC. For information about the
underlying credit rating see press release dated Oct. 11, 2013 available
at www.fitchratings.com.
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 and redemption, as well as purchase price for tendered bonds. Additionally, the bond obligor is in the flow of funds to make timely payments of principal and interest due upon maturity and redemption. The credit-enhanced rating will expire upon the earliest of: (a) Feb. 19, 2017, the initial stated expiration date of the substitute LOC, unless such date is extended; (b) conversion to a mode other than the weekly rate; (c) any prior termination of the substitute LOC; and (d) defeasance of the bonds. The substitute LOC provides full and sufficient coverage of principal plus an amount equal to 35 days of interest at a maximum rate of 10% based on a year of 365 days and purchase price for tendered bonds, while in the weekly rate mode. On the effective date, the remarketing agent for the bonds will be Citigroup.
RATING SENSITIVITIES:
The long-term rating is tied to the Fitch
long-term rating assigned to the bond obligor and the long-term rating
that Fitch maintains on the bank providing the substitute LOC. Changes
to one or both of these ratings may affect the long-term rating assigned
to the bonds.
The short-term rating is exclusively tied to the short-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.
Applicable Criteria and Related Research:
--'U.S. Municipal
Structured Finance Criteria', Feb. 27, 2013;
--'Rating Guidelines
for Letter of Credit-Supported Bonds', June 14, 2013.
Applicable Criteria and Related Research:
U.S. Municipal Structured
Finance Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701570
Rating
Guidelines for Letter of Credit-Supported Bonds
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=710476
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