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Kroll Bond Rating Agency Assigns a Long-Term Rating of AA- with a Stable Outlook to the Municipal Improvement Corporation of Los Angeles Lease Revenue Bonds, Series 2014-A and Refunding Series 2014-BNEW YORK --(Business Wire)-- Kroll Bond Rating Agency (KBRA) assigns a long-term rating of AA- with a stable outlook to the Municipal Improvement Corporation of Los Angeles (the Corporation or MICLA), Lease Revenue Bonds, Series 2014-A and Refunding Series 2014-B. The Lease Revenue Bonds are payable from lease rental payments paid by the City to the Corporation under the Facility Lease Agreement for the Series 2014-A Bonds and the Series 2014-B Bonds, respectively. The City is required to make lease rental payments from any source of available funds in an amount sufficient to pay principal and interest on the respective Series of Bonds, as scheduled. Lease rental payments to be made by the City are subject to abatement during any period where there is substantial interference with the use and occupancy of the leased project by the City. The KBRA rating of AA- with a stable outlook is based on the City's long term general obligation rating of AA with a stable outlook and evaluation of certain risks associated wit abatement leases. KBRA has rated the Series 2014-A and Series 2014-B Bonds one notch lower than the long term general obligation rating based on lack of construction risk, sufficient property and casualty insurance and rental interruption insurance for insured risks, a seismic analysis which indicates moderate risk of damage from earthquake, essentiality of the leased projects to City operations and the strong financial condition of the City, as evidenced by increasing reserve levels and strong liquidity. This rating is based on the City's long-term general obligation rating AA with a stable outlook and evaluation of the factors discussed in KBRA's U.S. State and Local Government Abatement Lease Methodology, published on August 28, 2010. Please see KBRA's rating report City of Los Angeles, CA General Obligation Bonds, published on August 25, 2014 for a discussion of the general obligation credit of the City of Los Angeles. About Kroll Bond Rating Agency KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP). |
