NEW YORK--(BUSINESS WIRE)--Fitch Ratings assigns an 'AA-' rating to $22.5 million Capital City Economic Development Authority (CCEDA, or the Authority) parking and energy revenue bonds, 2008 series D. The bonds are expected through negotiation on or about the week of Dec. 17. The bonds are due June 15, 2010-2034; early redemption provisions will be determined on final sale. Fitch also affirms the 'AA-' rating on outstanding CCEDA parking and energy revenue bonds rated by Fitch. The Rating Outlook is Stable.The parking and energy revenue bonds are secured by a state contract for financial assistance equal to annual debt service on the bonds, as well as by parking and energy revenues from facilities associated with the Adriaen's Landing project in Hartford. The current series is the first since 2005, and supports ongoing project construction. The site encompasses a convention center and hotel, completed in 2005, a science museum, now under construction, and residential, retail and parking facilities. The current bonds are being issued pursuant to a 2004 authorization envisioning a total of $122 million in borrowing, including bonds and loans; the new bonds are on parity with three earlier series and complete existing authorization. A $12.5 million loan is separately payable by parking payments made by Travelers Insurance and a mortgage on the facility and are not backed by the state contract.
Ultimate security for the bonds rests with the State of Connecticut and its debt service commitment under the state contract, which provides for a standing appropriation for full principal and interest. The Authority covenants to collect pledged parking and energy fees to provide 1.2 times (x) coverage of annual debt service, net of operating expenses; coverage has been below 1x, with contract payments making up the difference. The state pledges its full faith and credit to the contract payments which are made directly to the trustee, and is reimbursed by parking and energy fees if available. The state contract is limited to $9 million annually, and the CCEDA has agreed to not incur any obligation which would exceed this amount. Projected debt service including the new bonds is estimated at $7 million. One of three outstanding series is variable-rate bonds, synthetically hedged to a fixed rate for the life of the issue.
The state has previously used the debt service commitment approach for other financings including general obligation issues of the University of Connecticut and for tax increment financings by the Connecticut Development Authority, and for various agency financings which employ a debt service reserve for which the state has a deficiency make-up provision.
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