On the effective date of Aug. 8, 2012, Fitch Ratings will maintain the Long-term 'A+' Rating Watch Negative rating, and confirm the Short-term 'F1' rating, for the New York Liberty Development Corporation Multi-Modal Liberty Revenue Refunding Bonds (World Trade Center Project-Towers 3-4) $1,035,000 series 2011B-1, in conjunction with a mandatory tender occurring on Aug. 8, 2012. The series 2011B-1 bonds have been re-designated from the original 2011B bonds and are being remarketed with a new LOC from JPMorgan Chase Bank, N.A. on that date. Fitch Ratings will also maintain the Long-term 'A+' Rating Watch Negative rating, and confirm the Short-term 'F1' rating on the $300,000 series 2011B-2 bonds (originally a portion of the series 2011A bonds), which are being redesignated and remarketed with an LOC from JPMorgan Chase Bank, N.A. on that date. The ratings will be based on the support provided by the irrevocable direct- pay letters of credit (LOCs) to be issued by JPMorgan Chase Bank, N.A. (rated 'A+/F1', Long-term on Rating Watch Negative).
The bank is obligated to make payments of principal of and interest on the bonds upon maturity, acceleration and redemption, as well as purchase price for tendered bonds. The ratings will expire upon the earliest of: (a) May 29, 2013, the stated expiration date of the LOCs; (b) any prior termination of the LOCs; or (c) defeasance of the bonds. The LOCs provide full and sufficient coverage of principal plus an amount equal to 34 days of interest at a maximum rate of 12% based on a year of 365 days and purchase price for tendered bonds, while in the weekly and daily rate modes. The Remarketing Agent for the bonds is Goldman, Sachs & Co.
The bonds bear interest at a weekly rate, but may be converted to a daily, term, flexible, libor-indexed, or fixed rate. While bonds bear interest in the weekly or daily rate modes, interest payments are on the first business day of each month. The trustee is obligated to make timely draws on the LOC to pay principal, interest, and purchase price. Funds drawn under the LOCs are held uninvested, and are free from any lien prior to that of the bondholders. Holders may tender their bonds on any business day, provided the remarketing agent is given the requisite prior notice of the purchase. The bonds are subject to mandatory tender: (1) upon conversion of the interest rate; (2) upon expiration, substitution or termination of the LOCs; (3) following receipt of written notice from the bank of an event of default under the Reimbursement Agreement, or that the interest component will not be reinstated; (4) the initial term rate period mandatory tender date, May 22, 2013 or such subsequent date, and (5) while in the daily or weekly rate mode, any business day specified by the borrower following trustee's receipt of notice of such tender from the borrower. Optional and mandatory redemption provisions also apply to the bonds. Additional bonds may be issued, no earlier than May 22, 2013, provided they receive a separate series designation.
Bond proceeds will be used to finance a portion of the cost of construction of Tower 3 and 4 at the World Trade Center site in Lower Manhattan in New York City.
Additional information is available at www.fitchratings.com.
Applicable Criteria and Related Research:
--'U.S. Municipal Structured Finance Criteria' (Feb. 28, 2012);
--'Rating Guidelines for Letter of Credit-Supported Bonds' (June 20, 2012).
Applicable Criteria and Related Research:
U.S. Municipal Structured Finance Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=672570
Rating Guidelines for Letter of Credit-Supported Bonds
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=681737
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Contacts:
Fitch Ratings
Primary Analyst
Joseph Staffa, +1-212-908-0829
Senior
Director
Fitch, Inc.
One State Street Plaza
New York, NY
10004
or
Secondary Analyst
Linda Friedman, +1-212-908-0727
Senior
Director
or
Committee Chairperson
Trudy Zibit,
+1-212-908-0689
Managing Director
or
Media Relations
Elizabeth
Fogerty, New York, +1-212-908-0526
elizabeth.fogerty@fitchratings.com