Bangkok--22 Jun--Standard & Poor's
(Editor's note: The ratings in this article are based on information provided to us as of the date of the published ratings. To the extent any of the information changes, including maturity dates and respective note coverage at maturity, we could revise the ratings.)
Standard & Poor's Ratings Services assigned its 'SP-1+' short-term rating to Los Angeles, Calif.'s tax and revenue anticipation notes (TRANs) series 2011A-D. The series 2011A $325 million TRANs mature on March 30, 2012, the series 2011B $325 million TRANs mature on April 30, 2012, the series 2011C $325 million TRANs mature on May 31, 2012, and the series 2011D $325 million TRANs mature on June 29, 2012.
"The rating reflects what we view as strong coverage of TRANs repayment amounts by the city's projected net available general fund and pledged debt service fund cash balances at the maturity dates," said Standard & Poor's credit analyst Sussan Corson.
The rating also reflects a note structure that includes the early set-aside of TRAN repayment amounts, and Los Angeles' general creditworthiness, as reflected in its 'AA-' general obligation rating and history of accurate cash flow projections reflecting positive variances between original and estimated note coverage levels.
The notes are secured by available taxes, income, revenues, and other unrestricted funds that the city is to receive for the general fund attributable to the fiscal year ending June 30, 2012. According to the resolution, Los Angeles agrees to deposit pledged revenue into the debt service fund in an amount equal to 15% of total TRANs principal and interest in January 2012, 10% in February 2012, 25% in March 2012, 25% in April 2012, and 25% in May 2012. We understand that the city is issuing the notes to manage its cash flows, which reflect somewhat uneven cash receipts compared with its disbursements.
RELATED CRITERIA AND RESEARCH
USPF Criteria: Short-Term Debt, June 15, 2007
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Media Contact:
Edward Sweeney, New York (1) 212-438-6634,
[email protected]
Analyst Contacts:
Sussan Corson, New York (1) 212-438-2014
Misty Newland, San Francisco (1) 415-371-5073