TEXT-Fitch rates State of Georgia GO bonds 'AAApre'
(The following statement was released by the rating agency) Feb 7 - Fitch Ratings assigns a rating of 'AAApre', Negative Outlook to the State of Georgia general obligation (GO) bonds, refunded on Jan. 8, 2013, consisting of: --$58,650,000 GO refunding bonds 2004C maturing July 1, 2015 - July 1, 2018; --$113,360,000 GO bonds 2006B maturing March 1, 2022 - March 1, 2024; and --$199,535,000 GO bonds 2006G maturing Oct. 1, 2019 - Oct. 1, 2024 (the bonds). The 'AAApre', Negative Outlook rating is based on the pledge of securities in the escrow deposit fund securing the bonds and reflects the lien of the refunded bondholders on the escrow trust funds and that all amounts 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. Fitch also maintains an unenhanced rating of 'AAA', Stable Outlook on the bonds based on the GO pledge of the state's full faith and credit (rated 'AAA', Stable Outlook by Fitch). The bonds remain a general obligation of the state even though the source of repayment is expected to be the securities in the escrow deposit fund, further described below. For certain of these maturities, the 'AAA', Stable Outlook rating was incorrectly withdrawn following the refunding. The unenhanced ratings have been corrected. For more information on the State of Georgia GO rating, see press release 'Fitch Rates Georgia $583MM General Obligations 'AAA' Outlook Stable' dated Dec. 6, 2012 available at 'www.fitchratings.com'. The 2004C bonds were partially refunded with proceeds of the State's GO bonds 2013B. The 2006B and 2006G bonds were refunded with proceeds of the State's GO bonds 2013C. The ratings apply to the 2004C, 2006B and 2006G bonds listed by CUSIP numbers, below. The escrow agent, Bank of New York Mellon Trust Company, N.A., holds two separate special irrevocable escrow deposit trust funds, one for the benefit of the 2004C refunded bondholders and one for the benefit of the 2006B and 2006G refunded bondholders. All cash and securities held in each respective fund are pledged irrevocably to the payment when due of interest on the refunded bonds and the payment of principal upon redemption. The refunded 2004C bonds will be redeemed on July 1, 2014, the refunded 2006B bonds will be redeemed on March 1, 2016, and the refunded 2006G bonds will be redeemed on Oct. 1, 2016, all at a price of par plus accrued interest. Samuel Klein and Company verified the mathematical accuracy of computations relating to the adequacy of income from escrowed funds to pay debt service requirements of the refunded bonds. These computations were contained in schedules provided to them by Public Resources Advisory Group, financial advisor for the refunding bonds. According to the Samuel Klein verification report, the securities and cash deposited will produce amounts necessary for timely payment of the principal and interest on the refunded bonds. Prior to accepting substitute investment securities, 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', Negative Outlook rating applies to the 2004C bonds with the following CUSIP numbers: 373384D29 373384D37 373384D45 373384D52 The 'AAApre', Negative Outlook rating applies to the 2006B bonds with the following CUSIP numbers: 373383W53 373383W61 373383W79 The 'AAApre', Negative Outlook rating applies to the series 2006G bonds with the following CUSIP numbers: 3733833D8 3733833E6 3733833F3 3733833G1 3733833H9 3733833J5 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 Prerefunded Municipal Bonds' (Dec. 4, 2012). Applicable Criteria and Related Research: U.S. Municipal Structured Finance Criteria Guidelines for Rating Prerefunded U.S. Municipal Bonds (New York Ratings Team)