Bangkok--14 Aug--Standard & Poor's
Standard & Poor's Ratings Services revised its rating to 'AA/A-1+' from 'AAA/A-1' on Arizona Health Facilities Authority's variable-rate demand obligations, series 2006, issued for La Loma Senior Living Services Inc. based on the delivery of a confirming letter of credit (CLOC) provided by Banco Santander (AA/A-1+) on Aug. 13, 2009. The CLOC will replace a CLOC provided by Citibank N.A. (A+/A-1). Following the substitution, the fronting letter of credit (FLOC) provided by Sovereign Bank (A/A-1) will remain in place. The issue will then not be eligible for application of our joint support criteria since we consider the banks too highly correlated, as Sovereign Bank is a wholly owned subsidiary of Banco Santander. Because the FLOC and the CLOC each will fully support payment of the bonds, according to our criteria, the rating on the bonds reflects the higher rating of either Sovereign Bank or Banco Santander.
RELATED RESEARCH
Criteria: Methodology And Assumptions: Approach To Evaluating Letter Of Credit-Supported Debt, July 6, 2009
USPF Criteria: "Municipal Applications For Joint Support Criteria," June 25, 2007
Criteria: "Joint Support Criteria Update," April 22, 2009
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