KEY RATING DRIVERS
The rating is based on the support provided by an irrevocable direct-pay confirming letter of credit (CLOC) issued by Agribank, FCB (rated 'AA-/F1+'; Stable Outlook), which confirms an irrevocable direct-pay letter of credit (LOC) issued by Farm Credit Services of America, FLCA, which is not rated by Fitch.
The LOC bank is obligated to make regularly scheduled payments of principal of and interest on the bonds in addition to payments due upon maturity, acceleration and redemption, as well as purchase price for tendered bonds. The CLOC bank is obligated to make a payment for all outstanding bonds in the event the LOC bank fails to honor any draw or repudiates its obligations under the LOC. The rating will expire upon the earliest of: (a)
The bonds will bear interest at a weekly rate, but may be converted to a fixed rate. While bonds bear interest in the weekly rate mode, interest payments are on the first Thursday of each November, February, May, and August The first interest payment date is scheduled for
Holders may tender their bonds on any business day, provided the trustee and remarketing agent are given the requisite prior notice of the purchase. The bonds are subject to mandatory tender: (1) upon conversion of the interest rate to a fixed rate mode; or (2) upon substitution of the LOC or CLOC. The bonds are subject to mandatory redemption upon the expiration or termination of the LOC or CLOC. Additional optional and mandatory redemption provisions also apply to the bonds. There are no provisions for the issuance of additional bonds.
Bond proceeds will be used to finance the cost of acquiring, constructing, and equipping the solid waste disposal components of a dairy production facility.
The rating is exclusively tied to the short- and long-term rating that Fitch maintains on the bank providing the CLOC and will reflect all changes to that rating.
Additional information is available at www.fitchratings.com.
--'U.S. Municipal Structured Finance Criteria',
--'Rating Guidelines for Letter of Credit-Supported Bonds and Commercial Paper',
U.S. Municipal Structured Finance Criteria
Rating Guidelines for Letter of Credit-Supported Bonds and Commercial Paper
Source: Fitch Ratings
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