Fitch Rates Truckee Meadows Water Authority, Nevada's Bank Notes 'A+'
Source: Business Wire
--$160 million water revenue commercial paper notes, series 2006A and series 2006B.
The Rating Outlook is Negative.
RATING RATIONALE:
Fitch has reviewed the interest rates, cure periods and amortization schedules specified in the documents governing the bank notes. Under the terms of the Amended and Restated Reimbursement Agreement, the authority is required to amortize bank note amounts in approximately equal monthly installments over a five-year period beginning 91 days after a liquidity draw. At present, there are no bank notes outstanding.
While the terms of potential bank notes could pressure the authority's financial performance if the entire commercial paper authorization were to become bank notes for a sustained time period, Fitch believes that the authority's existing financial profile as well as the authority's implied market access to take out such notes with long-term debt serve to offset some concern. Furthermore, Fitch believes the risks associated with the notes are adequately reflected at the current rating level.
SECURITY:
The bank notes are payable solely from and secured by a subordinate lien on net revenues of the authority after payment of the authority's senior lien bonds and any proceeds of obligations issued to refund any advances made under the Restated Reimbursement Agreement.
For more information on the authority, see Fitch's press release titled 'Fitch Rates Truckee Meadows Water Authority, Nevada, Water Revs 'A', Outlook to Negative,' dated Jan. 20, 2010. For information about Fitch's recalibration of this rating see Fitch's press releases 'Fitch to Recalibrate U.S. Municipal Bond Ratings Today' or 'Fitch Releases Recalibration Summary Information on U.S. Water and Sewer Ratings', both dated April 30, 2010. Each of these press releases are available on Fitch's web site at 'www.fitchratings.com'.
Applicable criteria available on Fitch's website at 'www.fitchratings.com' include:
--'Revenue-Supported Rating Criteria' dated Dec. 29, 2009.
--'Water and Sewer Revenue Bond Rating Guidelines' dated Aug. 6, 2008.
Additional information is available at 'www.fitchratings.com'.
Contact:
Fitch Ratings
Doug Scott, +1-512-215-3725, Austin
Julie Seebach, +1-512-215-3740, Austin
Media Relations:
Cindy Stoller, +1-212-908-0526, New York
cindy.stoller@fitchratings.com
