The Rating Outlook is Stable.
Security for both bond programs is based on the irrevocable and absolute pledge of the MBOI to replenish debt service reserve shortfalls from the MBOI's legally available resources. Additionally, MBOI irrevocably agrees to provide liquidity support for tendered INTERCAP program bonds.
KEY RATING DRIVERS
STRONG REPLENISHMENT MECHANISM: Both programs benefit from the board's unconditional pledge to cure deficiencies from legally available funds in advance of the debt service payment date.
BOARD'S RESOURCES AMPLE: The board's resources available for enhanced programs are far in excess of total bond principal, supporting the long-term 'AA' rating. Board resources additionally provide ample liquidity to purchase tendered INTERCAP revolving program bonds, supporting the short-term 'F1+' rating on the INTERCAP revolving program.
SIGNIFICANT INCREASES IN BOARD BALANCES: Available funds have risen considerably in recent years in concert with the improved financial position of the state of
LIMITS ON DEBT: There are statutory and policy limits on the amount of long- and intermediate-term debt that can be secured by the board's pledge.
NO DRAWS FOR RESERVE REPLENISHMENT: Both programs have a strong repayment history from underlying loans, with no borrower defaults to date, no draws on the debt service replenishment provision and no reliance on the board's liquidity for the INTERCAP revolving program.
CONTINUED AMPLE BALANCES: The ratings are sensitive to continued maintenance of ample MBOI balances available for debt service replenishment for both INTERCAP revolving program bonds and master loan program bonds, and for purchase of tendered INTERCAP revolving program bonds.
The long-term 'AA' rating on both programs incorporates the continued low leveraging of the MBOI's debt service reserve replenishment guarantee. As of
All INTERCAP revolving program bonds of MBOI and master loan program bonds and
MBOI's INTERCAP revolving program is primarily for
Funds identified as available for borrowing in the event of reserve fund deficiency or for liquidity support consist of the Treasurer's Fund (the state's operating fund) and a portion of the
The board's available funds fluctuate throughout the year and have varied over time, ranging from a low of
The corpus of the CST fund cannot be invaded without approval by three-quarters of the state legislature, although
Additional information is available at 'www.fitchratings.com'.
--'Tax-Supported Rating Criteria' (
--'U.S. State Government Tax-Supported Rating Criteria' (
--'Rating U.S. Public Finance Short-Term Debt' (
--'Rating Guidelines for State Credit Enhancement Programs' (
Tax-Supported Rating Criteria
U.S. State Government Tax-Supported Rating Criteria
Rating U.S. Public Finance Short-Term Debt
Rating Guidelines for State Credit Enhancement Programs
Source: Fitch Ratings
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