NEW YORK--(BUSINESS WIRE)--Fitch Ratings assigns a rating of 'F1+' to the City and County of San Francisco lease revenue commercial paper certificates (CP certificates) consisting of tax-exempt series 3 and taxable series 3-T in an aggregate principal amount not to exceed $100,000,000.
KEY RATING DRIVERS:
The 'F1+' rating assigned to the series 3 and 3T CP certificates is based on the support provided by an irrevocable direct-pay letter of credit (LOC) issued by State Street Bank and Trust Company, (State Street, rated 'A+/F1+', Positive Outlook). The LOC provides coverage for the principal amount of the CP certificates and interest due on maturity dates of the CP certificates.
The short-term 'F1+' rating on the CP certificates will expire on the earlier of Feb. 26, 2019, the expiration date of the LOC, unless such date is extended, or upon any prior termination of the LOC.
U.S. Bank National Association, as the Delivery and Paying Agent (DPA) for the CP certificates is directed to draw on the LOC to pay maturing CP certificates. The LOC provides sufficient coverage for certificate issuance up to $109,000,000 inclusive of interest coverage. Citigroup Global Markets, Inc., Loop Capital Markets LLC., Wells Fargo Bank, N.A., and U.S. Bancorp Investments, Inc. are the dealers for the CP certificates.
All CP certificates will be issued at par, with interest due at maturity. Following the occurrence of an event of default under the LOC, the LOC bank may direct the DPA to immediately stop the issuance of any additional CP certificates. The bank may also deliver a final drawing notice to the DPA directing the DPA to draw for all CP certificates outstanding plus interest due thereon. In such event the LOC with expire on the earlier to occur of: (i) 15 days following the receipt by the DPA of the final drawing notice; and (ii) the date on which the drawing resulting from the delivery of the final drawing notice is honored. The DPA is instructed to draw on the LOC no later than the business day prior to the fifteenth day following the receipt of the final drawing notice. The proceeds of the final drawing will be held uninvested in a segregated payment account until all outstanding CP maturities are paid.
Proceeds will be used to fund certain capital projects.
RATING SENSITIVITIES:
The rating is exclusively tied to the short-term rating that Fitch maintains on the bank providing the 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.y 24, 2014;
--'Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support', Jan. 27, 2014.
Applicable Criteria and Related Research:
Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=730736
U.S. Municipal Structured Finance Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736618
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=821496
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