TEXT-Fitch rates Calif. Public Works lease revs 'AAApre'
Nov 20 - Fitch Ratings assigns an 'AAApre', Negative Outlook rating to the $68,895,000 State Public Works Board of the State of California (the Issuer) Lease Revenue Refunding Bonds (Department of Corrections) 2004 Series E (California State Prison- Lassen County, Susanville) maturing June 1, 2015- 2018. These bonds were refunded on Oct.r 30, 2012 with proceeds of the Issuer's $65,485,000 Lease Revenue Refunding Bonds (Department of Corrections and Rehabilitation) 2012 Series I (California State Prison- Lassen County, Susanville) and amounts held in the Revenue Fund for the refunded bonds. The refunded bonds will be redeemed on June 1, 2014 at par. The Treasurer of the State of California holds an account in trust for the benefit of the refunded bondholders. All funds and securities held in this account are pledged irrevocably to the payment when due of interest on the refunded bonds and principal upon redemption. The 'AAApre', Negative Outlook rating reflects this pledge and that all funds have been invested in direct non-callable obligations of the United States. The U.S. full faith and credit rating is currently rated 'AAA', Negative Outlook by Fitch. Any substitute investments acquired in the future are also limited to direct non-callable obligations of the United States. The Arbitrage Group, Inc. verified the mathematical accuracy of computations relating to the sufficiency of receipts from escrowed funds and securities to pay principal and interest on the refunded bonds to and at early redemption. These computations were contained in schedules provided to them by Loop Capital Markets, underwriter for the refunding bonds. According to The Arbitrage Group verification report, the receipts from the securities and cash deposited will be sufficient to pay to and at early redemption the principal of and interest on the refunded bonds. Prior to accepting substitute or additional investment securities or disbursing funds to the state, the escrow agent must receive a new report verifying the continued sufficiency of escrowed funds to meet all future payments of principal and interest on the refunded bonds. The 'AAApre' ratings applies to the bonds with the following CUSIP numbers: 130684KN2 130684KM4 130684KP7 130684KR3 130684KQ5 130684KS1 Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings. Applicable Criteria and Related Research: --'U.S. Municipal Structured Finance Rating Criteria', Feb. 28, 2012, --'Guidelines for Rating Pre-Refunded Municipal Bonds', Dec. 14, 2011. Applicable Criteria and Related Research: U.S. Municipal Structured Finance Criteria Guidelines for Rating Prerefunded U.S. Municipal Bonds