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Fitch Rates Rutgers, NJ GO Rfdg Bonds, Series 2002A 'AA-/F1+'
[February 10, 2016]

Fitch Rates Rutgers, NJ GO Rfdg Bonds, Series 2002A 'AA-/F1+'


Fitch Ratings assigns an 'AA-/F1+' rating to Rutgers State University, NJ's $61,400,000 ($33,000,000 currently outstanding) general obligation refunding bonds, series 2002A. The Rating Outlook is Stable for the long-term rating.

KEY RATING DRIVERS:

The 'AA-' long-term rating and Stable Outlook are based on the credit quality of the Rutgers University. For more information on the long-term rating, see Fitch's press release dated July 29, 2015, available on Fitch's web site at www.fitchratings.com'.

The short-term 'F1+' rating is based on the liquidity support provided by TD Bank, N.A. (rated 'AA-/F1+', Stable Outlook) in the form of a Standby Bond Purchase Agreement (SBPA), which has a stated expiration date of May 1, 2018, during the daily and weekly interest rate modes.

The SBPA provides for the payment of the principal component of purchase price plus an amount equal to 35 days of interest calculated at a maximum rate of 12%, based on a year of 365 days for tendered bonds during the daily and weekly rate mode in the event that the proceeds of a remarketing of the bonds are insufficient to pay the purchase price following an optional or mandatory tender. The SBPA will expire on May 1, 2018, the stated expiration date, unless such date is extended, conversion to a mode other than daily or weekly rate; or upon the occurrence of certain events of default which result in a mandatory tender or other termination events related to the credit of the bond obligor which result in an automatic and immediate termination. The remarketing agent for the bonds is J.P. Morgan Securities Inc. Fitch is assigning a rating to these bonds for the first time.

The bonds will be issued in the weekly rate mode, but may be converted to a daily, term, flexible or fixed rate. While bonds bear interest in the daily or weekly rate mode, interest is paid on the first business day of each month. Holders of bonds bearing interest in the daily or weekly rate mode may tender their bonds for purchase with the requisite prior notice. The trustee is obligated to make timely draws on the SBPA to pay purchase price in the event of insufficient remarketing proceeds, and in connection with the expiration or termination of the SBPA, except in the case of the credit-related events permitting immediate termination or suspension of the SBPA.

Funds drawn under the SBPA are held uninvested, and are free from any lien prior to that of the bondholders. The bonds are subject to mandatory tender: (1) upon conversion of the interest rate mode, except between daily and weekly rate; (2) upon expiration, substitution or termination of the SBPA; and (3) following the receipt of written notice from the bank of an event of default under the SBPA, directing such mandatory tender. Optional and mandatory redemption provisions also apply to the bonds.

RATING SENSITIVITIES

The short-term rating reflects the short-term rating that Fitch maintains on the bank prviding liquidity support and will be adjusted upward or downward in conjunction with the short-term rating of the bank and, in some cases, the long-term rating of the bond obligor. The long-term rating is exclusively tied to the creditworthiness of the bond obligor and will reflect all changes to that rating.



Additional information is available at www.fitchratings.com.

Applicable Criteria


Rating Criteria for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support (pub. 28 Jan 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=876837

Revenue-Supported Rating Criteria (pub. 16 Jun 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750012

U.S. College and University Rating Criteria (pub. 12 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748013

U.S. Municipal Structured Finance Criteria (pub. 23 Feb 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=862222

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=999312

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=999312

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.


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