Fitch Ratings assigns an 'F1+' rating to the following New York State Environmental Facilities Corp.'s (EFC) extendable municipal commercial paper (EMCP) notes:
-- (Series 1) program in an aggregate authorized amount not to exceed $200 million
Note proceeds will reimburse EFC for the cost of acquiring loans for its clean water and drinking water state revolving fund (SRF) program. EMCP notes may also refund outstanding EMCP notes and pay costs of issuance. The issuance of the series 1 notes, expected within the next 90 days, represents EFC's initial utilization of EMCP.
At this time Fitch also withdraws the 'F1+' rating on EFC's EMCP notes (series 1) program assigned on July 30, 2009. No notes were ever issued under this program.
RATING RATIONALE:
-- The rating is based on the strong credit quality of the 2010 Master Financing Indenture (MFI) SRF program bonds (program bonds rated 'AAA' with a Stable Outlook by Fitch).
-- The 'F1+' rating is also supported by the solid program structure and ample available liquidity to redeem the EMCP, if necessary.
Key Rating Drivers
-- Sufficient internal liquidity and/or continued market access for existing bond programs are necessary to maintain the EMCP rating.
SECURITY:
The EMCP notes are secured by the proceeds of notes or other obligations issued by EFC, pledged recipient repayments, and a subordinate commitment on EFC's equity account, which consists of released (or de-allocated) reserves from bonds issued under EFC's master trust agreement including the senior and subordinate 1991 MFI pooled program (SRF bonds rated 'AAA', Stable Outlook by Fitch), the New York City Municipal Water Finance Authority program (senior and subordinate bonds rated 'AAA' and 'AA+' by Fitch, respectively) and the senior and subordinate 2010 MFI pooled program. EFC maintains within its equity fund $300 invested in liquid, short-term securities, which provide significant protection to EMCP note holders, if needed.
CREDIT SUMMARY:
The EMCP will have original maturities from one to 90 days from the original issue date of each note. However, EFC reserves the right to extend the maturity up to 270 days from and including the original issue date. If the notes are extended to the extended maturity date, the interest rate would be reset based on a formula tied to the SIFMA and the program's EMCP rating.
EMCP notes are expected to be repaid by the proceeds of bonds issued through EFC's 2010 MFI (see Fitch release "Fitch Rates NYS EFC 2010C SRF Bonds 'AAA'", dated May 19, 2010) or new EMCP notes. However, EFC has ample liquid resources available within its equity account to repay the EMCP notes, if necessary. EFC will transfer to the trustee sufficient funds from pledged sources on or before each date when EMCP notes are due.
Applicable criteria on Fitch's web site at 'www.fitchratings.com' include:
--'Tax-Supported Rating Criteria' (Dec. 21, 2009);
--'U.S. State Government Tax-Supported Rating Criteria' (Dec. 28, 2009).
--'Revenue-Supported Rating Criteria' (Dec. 29, 2009);
--'State Revolving Fund and Municipal Loan Pool Rating Guidelines' (April 28, 2008).
Additional information is available at 'www.fitchratings.com'.
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