TMCnet News

Fitch Downgrades S-T Rating on University of Mass Bldg Auth SR. Series 2008-1 to 'F1'
[April 22, 2016]

Fitch Downgrades S-T Rating on University of Mass Bldg Auth SR. Series 2008-1 to 'F1'


Fitch Ratings has downgraded the short-term rating assigned to the University of Massachusetts Building Authority project revenue bonds, senior series 2008-1 to 'F1' from 'F1+'. This action is in connection with: (i) the substitution of the liquidity support provided by JPMorgan Chase Bank, National Association (rated 'AA-/F1+', Stable Outlook) in the form of a Standby Bond Purchase Agreement (SBPA), with a substitute SBPA to be issued by Barclays Bank PLC (rated 'A/F1', Stable Outlook; and (ii) the mandatory tender of the bonds, which occurred on April 15, 2016.

KEY RATING DRIVERS:

The short-term 'F1' rating is based on the liquidity support provided by Barclays Bank PLC, in the form of a substitute SBPA, which has a stated expiration date of April 22, 2019, unless extended or earlier terminated, during the weekly interest rate mode only. The long-term 'AA' rating continues to be based on the rating assigned to the bonds. The Rating Outlook is Stable for the long-term rating. For more information on the long-term rating, see the press release "Fitch Rate Univ of Massachusetts Sr. Series Revs 2015-1 & 2015-2 Rfdg Revs 'AA; Outlook Stable", dated Feb. 11, 2015, available on Fitch's website at www.fitchratings.com.

The substitute SBPA provides for the payment of the principal component of purchase price plus an amount equal to 187 days of interest calculated at a maximum rate of 12%, based on a year of 365 days for tendered bonds during the 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 substitute SBPA will expire on April 22, 2019, the stated expiration date, unless such date is extended; upon conversion to a daily, auction, term or fixed rate mode; or upon the occurrence of certain events of default which result in a mandatory tender or other events of default related to the credit of the bonds which result in an automatic and immediate termination. A mandatory tender of the bonds occurred prior to the SBPA substitution date on April 15, 2016. The remarketing agent for the bonds is Barclay Capital Inc.

RATING SENSITIVITIES

The short-term rating reflects the short-term rating that Fitch maintains on the bank providing liquidity support, and will be adjusted upward or downward in conjunction with the short-term ating of the bank and, in some cases, the long-term rating of the bonds. The long-term rating is exclusively tied to the creditworthiness of the bonds 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

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=1003047

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1003047

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.


[ Back To TMCnet.com's Homepage ]