MOODY'S AFFIRMS MIG1 OF KENTUCKY RURAL WATER FINANCE CORPORATION'S SERIES B-2009-2 NOTES

Posted on: December 18, 2009, 6:00 pm

NEW YORK, Dec 18, 2009 -- Moody's has affirmed the MIG 1 rating assigned to the Kentucky Rural Water Finance Corporation (KY) Public Project Construction Notes Series B-2009-2. Subsequent to the assignment of the MIG1, KRWFC decided to enter a repurchase agreement as an investment vehicle for the B-2009-2 note proceeds (effective December 22, 2009). The counterparty is Bayerische Landesbank (BLB, rated A1/P-1). Going forward, the rating of the notes will incorporate the credit quality of BLB, who is obligated under the agreement to repay KRWFC its purchase price on any draw date. A downgrade of BLB could impact the notes credit quality. In the event of a downgrade below P-1, BLB is obligated to: 1) assign the repurchase agreement to a P-1 provider 2) obtain a P-1 Letter Of Credit or guaranty or 3) take any action mutually agreed by trustee and BLB, which does not result in a downgrade or withdrawal of the rating on the Notes by Moody's...

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