MOODY'S AFFIRMS Aa2 RATING ON STATE OF CONNECTICUT GENERAL OBLIGATION BONDS 2005 SERIES A IN CONJUNCTION WITH CONVERSION

Posted on: July 19, 2011, 2:46 pm

NEW YORK, Jul 19, 2011 -- Moody's Investors Service has affirmed the Aa2 rating on the State of Connecticut's General Obligation Bond 2005 Series A in conjunction with the conversion of the bonds from variable rate demand with a Standby Bond Purchase Agreement (SBPA) provided by Dexia to SIFMA Index bonds with no credit facility. The bonds will be reoffered on August 1, 2011. The SIFMA indexed bonds will bear interest at a rate tied to the SIFMA index, not to exceed 10% annually. The bonds may be converted to bear interest at a flexible, weekly or fixed rate at any time on or after March 1, 2015. Annual maturities will be paid from the state's debt service budget in the year in which the bonds mature. The state will maintain two swap agreements ($140 million each) in connection with the 2005 Series A variable rate bonds. According to the swap agreement, the state pays a fixed rate and receives a variable rate based on LIBOR...

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