Fitch Rates City of Long Beach (California) Sr Sewer Rev CP Notes 'F1'
Source: Business Wire
The rating on the notes is based on the support of a direct-pay letter of credit (LOC) provided by Union Bank N.A. (rated 'A/F1' with the long-term rating on Rating Watch Negative). The LOC provides coverage for up to $20,000,000 in principal and an interest component not to exceed $1,800,000, which represents 270 days of interest, calculated at the maximum rate of 12% based on a year of 360 days.
U.S. Bank as Issuing and Paying Agent (IPA) will draw on the LOC at the times and in amounts that are sufficient to provide for the timely payment of the principal and interest on maturing notes. The series A notes will be issued at par, with interest due at maturity. The series B notes may be issued at par or at a discount; however, The Board of Water Commissioners of the City of Long Beach has no current plans to issue any series B notes and such notes were not offered pursuant to the Offering Memorandum for the notes. The IPA is instructed not to issue any notes that together with notes then outstanding will exceed the amount available under the LOC to pay the principal and interest or face amount on the notes at maturity. The rating on the notes expires on the earlier of June 9, 2011, the LOC termination date, unless such date is extended or any prior termination of the LOC. Barclays Capital is the dealer for the notes.
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