State guaranty - full faith and credit obligation of the state of
KEY RATING DRIVERS
FULL FAITH AND CREDIT PLEDGE: The state's guaranty pledge on qualifying school debt is a full faith and credit obligation, on par with that of its own GO bonds. As a result, bonds qualifying for the program receive an 'AAA' rating, equivalent to the state's GO bonds.
SOUND PROGRAM MECHANICS: Program mechanics allow sufficient time for state funds to be made available to pay debt service by the debt service payment date.
ABILITY TO ISSUE STATE GO BONDS: If insufficient funds are on hand, the state may issue GO bonds to meet its obligations under the guaranty.
The rating is sensitive to changes in the state's GO rating, to which it is linked.
Fitch will assign an 'AAA' rating to
Program mechanics allow sufficient time for state funds to be made available to pay debt service by the debt service payment date. Moneys for debt service are to be remitted by a school district's business administrator to the paying agent at least 15 days prior to the debt service payment date. Should a district be unable to meet its payment obligation at that time, the business administrator must immediately notify the paying agent and state treasurer by telephone and in writing by either fax or U.S. mail. If sufficient moneys have not been received at least 10 days prior to the payment date, the paying agent must immediately notify the state treasurer by telephone and in writing by either fax or U.S. mail. The state treasurer will then transfer to the paying agent, on or before the payment date, sufficient moneys to make the debt service payment.
As of fiscal year (FY) 2014, the state had guaranteed 280 bond issues for 39 of the state's 41 school districts, for an aggregate principal outstanding of
Additional information is available at 'www.fitchratings.com'
--'Tax-Supported Rating Criteria', dated
--'U.S. State Government Tax-Supported Rating Criteria', dated
--'Rating Guidelines for State Credit Enhancement Programs', dated
Tax-Supported Rating Criteria
Rating Guidelines for State Credit Enhancement Programs
U.S. State Government Tax-Supported Rating Criteria
Source: Fitch Ratings
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