Bangkok--21 Jul--Standard & Poor's
Standard & Poor's Ratings Services has assigned its 'AA' long-term rating to FYI Properties, Wash.'s $298.8 million series 2009 lease revenue bonds, issued on behalf of the State of Washington for the state's Department of Information Services (DIS). The outlook is stable.
"In our view, the rating reflects the commitment of the state, acting through the DIS, to make rental payments for the facility," said Standard & Poor's credit analyst Sussan Corson. We believe the rating also reflects rental payments not subject to abatement, and the state's general creditworthiness.
FYI Properties will use the issue's proceeds to capitalize interest on the bonds and finance the development of a six-story office building, three-story conference and training center wing, data center complex, and parking garage. The project will be on the capitol campus in Olympia, Wash.
The series 2009 lease revenue bonds are nonrecourse revenue obligations of FYI--a single purpose nonprofit corporation--and are payable from the DIS' monthly lease rental payments pursuant to the lease agreement between FYI and the state.
The DIS is the state agency responsible for providing coordinated planning and development of Washington's information technology services.
The stable outlook reflects our expectation that the project will be completed within the projected timeframe, and lease payments from the state will begin in a timely manner. The outlook also reflects what we view as Washington's strong financial management and our expectation that it will continue to make timely and proactive budget amendments as needed to maintain budgetary balance. The RDA, and the mechanisms that fund it, helped to mitigate the state's slumping economic and revenue performance this year, which will remain a challenge in the upcoming biennium. Nevertheless, in Standard & Poor's view, if economic recovery is slower than projected, a significant dependence on nonrecurring resources to balance the biennial budget will make it more difficult for Washington to return to structural budgetary balance, which could pressure the rating.
RELATED RESEARCH
USPF Criteria: "Appropriation-Backed Obligations," June 13, 2007
USPF Criteria: "Rating Government Department Appropriation-Backed Debt In U.S. Public Finance," Nov. 7, 2007
USPF Criteria: "Assessing Construction Risk," June 22, 2007
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Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Sussan Corson, New York (1) 212-438-2014
Gabriel Petek, CFA, San Francisco (1) 415-371-5042
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_ [email protected]
Americas Customer Service: (1) 212-438-7280
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