Fitch Rts $32MM Las Vegas, Nevada GO (Ltd Tax) VRDBs Ser 2006C 'AAA/F1+'
Source: Business Wire
The long-term 'AAA' rating is based on Fitch's methodology which considers the joint probability of the failure of both a rated municipal issuer and a bank LOC provider. The methodology results in a rating that is two notches higher than the stronger of the two credits if the following conditions are met: both entities have a rating of 'A' or higher; the transaction is structured such that payments from both the municipal issuer and the bank are in the flow of funds and both entities would have to fail to perform before the bonds defaulted; and the credit of the bank and the municipality have a low degree of correlation. If either Las Vegas or the Bank were to be downgraded to 'A-' or lower, the long-term rating assigned to the bonds would drop to that of the higher rated entity.
Pursuant to the LOC, the bank is obligated to make payments of principal, interest and purchase price when due. The rating will expire upon the earliest of: Aug. 21, 2013, the stated expiration date of the LOC, unless such date is extended; any prior termination of the LOC; and defeasance of the bonds. The LOC provides full coverage of principal plus an amount equal to 35 days' interest at a maximum rate of 12% based on a 365-day year and purchase price for tendered bonds. The remarketing agent for the bonds is Merrill Lynch, Pierce, Fenner & Smith Inc. The bonds are expected to be available for delivery on or about Aug. 21, 2006.
The bonds initially bear interest at a daily rate but may be converted to a weekly, R-FLOATS, unit pricing, term, auction or fixed interest rate mode. While bonds bear interest at the daily rate, interest payments will be made the first day of each calendar month, commencing Sept. 1, 2006. During the daily and weekly rate modes bondholders may tender their bonds on any business day, with the required prior notice. The bonds are subject to mandatory tender: on each mode change date; at the end of each unit pricing rate period; at the end of each term rate mode interest period; and on the expiration, substitution or termination of the LOC. Mandatory and optional redemption provisions also apply to the bonds.
The bond proceeds will be used to finance the cost of building projects, drainage and flood control projects, environmental remediation projects, park projects, and water projects for the City of Las Vegas, NV.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Contact:
Fitch Ratings, New York
Linda Friedman, 212-908-0727
Christopher Kimble, 212-908-0226 (Media Relations)
