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Kroll Bond Rating Agency Releases U.S. State and Local Government Short Term Cash Flow Note Rating Methodology

August 4, 2014

NEW YORK--(BUSINESS WIRE)-- Kroll Bond Rating Agency (KBRA) released today a rating methodology for U.S. State and Local Government Short Term Cash Flow Notes.

The rating methodology describes the major factors that Kroll Bond Rating Agency (KBRA) considers when rating cash flow note financings throughout the US. These obligations mature, in general, within twelve months of issuance and are usually secured by a specific pledged revenue stream, i.e. a specific property tax levy or state aid payments to be received in a specific year. These instruments include tax anticipation notes (TANs), revenue anticipation notes (RANs) and tax and revenue anticipation notes (TRANs). Repayment of these obligations is contingent on the timing and adequacy of pledged revenues. KBRA requires both historic and projected cash-flow statements to review these obligations and assign a rating. For the purposes of this Methodology, pledged revenue is defined as the funds legally available to pay principal and interest on the notes when due and reflected in the cash flow statements. Other forms of short term financings, including bond anticipation notes (BANs), the repayment of which relies on market conditions, in general, and in some cases on the issuer's access to long term markets, will be addressed in a separate methodology.

KBRA’s analysis combines both qualitative and quantitative factors in the assessment of credit quality, and our analytic process balances these considerations in making a rating determination. Within each rating determinant, KBRA has identified a set of characteristics that will result in different rating levels for each rating determinant. The ratings for each rating determinant are balanced in the process of assigning the overall cash flow note rating. These determinants and characteristics are representative and do not encompass all the factors taken into consideration when assigning a rating.

To view the report, U.S. State and Local Government Short Term Cash Flow Note Rating Methodology, please visit

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Kroll Bond Rating Agency

Kate Hackett, 646-731-2304


Alessandra D’imperio, 646-731-2383


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Source: Kroll Bond Rating Agency

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