NEW YORK--(BUSINESS WIRE)--Fitch Ratings has assigned 'AA/F1+' ratings to the Indiana Finance Authority's (the authority) $120,000,000 lease appropriation bonds (Convention Center Expansion Project), series 2008A. The bonds are expected to price the week of Aug. 18. Fitch has also affirmed approximately $3 billion of Indiana's (the state) appropriation debt at 'AA'. The Rating Outlook is Stable.The long-term 'AA' rating and Stable Outlook is based on the on the credit quality of the State of Indiana. The short-term 'F1+' rating is based on the liquidity support of a standby bond purchase agreement (SBPA) provided severally by: (1) RBS Citizens, National Association, D/B/A/ Charter One, as administrative agent and one of the banks, whose pro rata share of the commitment will be 56.7%; (2) JPMorgan Chase Bank, National Association, with a 29.1% pro rata share and (3) The Bank of New York Mellon, with a pro rata share of 14.2% of the commitment. The short-term rating will expire on the stated expiration date of the SBPA, August 19, 2011, unless such date is extended, or upon any earlier termination of the SBPA. Fitch's short-term rating expires on the expiration or termination of the SBPA.
The SBPA provides for the payment of the purchase price of tendered bonds during the daily and weekly rate modes in the event the proceeds of a remarketing of the bonds following an optional or mandatory tender are insufficient to pay the purchase price. The SBPA is sized to provide for the entire principal amount of the respective series of bonds that each supports, plus interest coverage of 37 days calculated at a maximum interest rate of 15%, based on a year of 365 days. The Bank of New York Mellon Trust Company, N.A., as trustee, is required to give notice to the bank in the event that remarketing proceeds are insufficient to pay the purchase price for tendered bonds. The remarketing agents for the bonds are JPMorgan Securities Inc. and Morgan Stanley & Co. Incorporated. The bonds are expected to be delivered through DTC on or about August 20, 2008.
The bonds initially bear interest in the weekly rate, but may also be converted to a daily, flexible, term or fixed interest rate mode. While the bonds bear interest in the weekly rate mode, interest will be payable on the first business day of each month, commencing Sept. 2, 2008. Holders of bonds bearing interest in the weekly or daily rate modes may tender their bonds for purchase upon delivery of prior notice to the remarketing and tender agents.
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