On the effective date of Nov. 1, 2010, Fitch Ratings will confirm the short-term rating of 'F1+' assigned to the State of Kansas Department of Transportation (DOT) adjustable tender highway revenue bonds $150,870,000 series 2008A consisting of:
--$23,000,000 series 2008A-1;
--$38,900,000 series 2008A-2;
--$595,000
series 2008A-3;
--$50,275,000 series 2008A-4;
--$38,100,000
series 2008A-5.
The 'AA+' long-term rating with a Stable Outlook assigned to the bonds continues to be based upon the rating assigned to revenue bonds of the State of Kansas Department of Transportation.
The short-term rating action is in connection with the substitution of the liquidity support provided by Wells Fargo Bank, National Association (rated 'AA-/F1+' with a Stable Outlook) in the form of a Standby Bond Purchase Agreement (SBPA), with a substitute SBPA issued by U.S. Bank National Association (rated 'AA-/F1+' with a Stable Outlook).
On the effective date, the short-term 'F1+' rating will be based on the liquidity support provided by U.S. Bank National Association, in the form of a substitute SBPA. The substitute SBPA provides for the payment of the principal component of purchase price plus an amount equal to 35 days of interest calculated at a maximum rate of 10%, based on a year of 365 days for tendered bonds during the daily and weekly rate modes in the event that the proceeds of a remarketing of the bonds are insufficient to pay the purchase price following an optional or mandatory tender. The substitute SBPA will expire on Nov. 1, 2012, the stated expiration date, unless such date is extended, conversion to a mode not covered by the SBPA; or upon the occurrence of certain other events of default which result in a mandatory tender or other termination events related to the credit of the Issuer which result in an automatic and immediate termination. The short-term 'F1+' rating will expire on the expiration or prior termination of the SBPA. The short-term rating may be adjusted upward or downward in conjunction with the long-term rating of the Issuer or the short-term rating of the bank. A mandatory tender of the bonds is scheduled to occur on Nov. 1, 2010, the SBPA substitution date. Wells Fargo Securities is the remarketing agent for the series 2008A-1, series 2008A-2 and series 2008A-5 bonds. BofA Merrill Lynch is the remarketing agent for the series 2008A-3 and series 2008A-4 bonds.
For more information on the long-term rating, see the press release dated July 29, 2010, available on Fitch's website at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'U.S. Municipal
Structured Finance Rating Criteria', Aug. 16, 2010;
--'Rating
Guidelines for Variable-Rate Demand Obligations Issued with External
Liquidity Support', May 29, 2009.
Applicable Criteria and Related Research:
U.S. Municipal Structured
Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=548588
Rating
Guidelines for Variable-Rate Demand Obligations Issued with External
Liquidity Support
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=443146
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Contacts:
Fitch Ratings
Primary Analyst
Linda Friedman, +1-212-908-0796
Senior
Director
33 Whitehall
New York, NY 10004
or
Secondary
Analyst
Mary Jane Ziga, +1-212-908-0529
Senior Director
or
Committee
Chairperson
Trudy Zibit, +1-212-908-0689
Managing Director
or
Media
Relations:
Cindy Stoller, +1-212-908-0526 (New York)
cindy.stoller@fitchratings.com