MOODY'S ASSIGNS MIG 1 RATING TO SOUTH CAROLINA ASSOCIATION OF GOVERNMENTAL ORGANIZATIONS' (SCAGO) $179.4 MILLION CERTIFICATES OF PARTICIPATION, SERIES 2010A

Posted on: June 28, 2010, 4:28 pm

NEW YORK, Jun 28, 2010 -- Moody's Investors Service has assigned a MIG 1 rating to the South Carolina Association of Governmental Organizations' (SCAGO) $179.4 million Certificates of Participation, Series 2010A (Evidencing Undivided Proportionate Interests in Tax Anticipation Notes (General Obligation) of Certain South Carolina School Districts). Proceeds of this issuance will provide cash flow loans for 37 participating school districts. While SCAGO is the issuer, the obligors will be the individual school districts issuing the Tax Anticipation Notes (TANs). SCAGO will purchase the TANs with the proceeds of the Certificates of Participation, which are issued in a sum equal to the aggregate amount of the TANs being issued by the school districts. This rating is based on the security provided by the South Carolina School District Credit Enhancement Program (SCSDCEP), which currently carries Moody's Aa1 long-term general obligation rating with a stable outlook, and applies to all school district debt that is secured by a general obligation pledge, including TANs. The stable outlook on the SCSDCEP rating is based on the assignment of a stable outlook to the State of South Carolina's Aaa general obligation rating, given that the SCSDCEP is a state-backed enhancement program. The short-term MIG 1 rating on the current issuance reflects the ability of the state Department of Education to intercept school aid prior to default to ensure timely and sufficient payment, a flow of funds which provides for early segregation of revenues to repay the notes, and the generally sound legal structure of this pooled TAN program...

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