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Fitch Rates Municipal Assistance Corp. -- NYC -- $1.758B Refunded Bonds 'AAA'
Publish Date : 12/4/2004 11:58:00 AM Source : Business News Onlypunjab.com
Fitch Ratings assigns an 'AAA' rating to $1,758,015,000 outstanding bonds of the Municipal Assistance Corporation for the City of New York ('MAC'), 1991 resolution bonds series D, E, G, H, I, J, L, M, N,O, P, that were refunded on Nov. 4, 2004 with proceeds of the Sales Tax Asset Receivable Corporation, sales tax asset revenue bonds fiscal 2005 series A and fiscal series 2005 B (taxable). On or prior to July 1, 2008, all of these refunded bonds will be redeemed or will have matured.
The Escrow Agent, The Bank of New York, has established an irrevocable escrow trust fund for the benefit of the refunded bondholders. The 'AAA' rating reflects this pledge and that all funds have been invested in U.S. Treasury obligations. In addition, according to MAC's bond counsel, certain covenants, agreements and other obligations of MAC to its bondholders have not been discharged. Consequently, the refunded bonds remain secured by the original bond security, primarily the state sales tax imposed solely within the City of New York.
Samuel Klein and Company verified the mathematical accuracy of debt service computations on the refunded bonds and income from the escrowed funds and securities, contained in schedules provided to them by Goldman Sachs & Co., Inc., underwriter for the Sales Tax Asset Receivable Corporation refunding bonds. In the opinion of Samuel Klein & Co., cash and securities deposited with the escrow agent will be sufficient to pay principal, interest and redemption premium, if any, on the refunded bonds and for the escrow agent to meet its obligations to reinvest cash balances under forward supply agreements with Bank of America, N.A.
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