MOODY'S AFFIRMS MIG 1 RATING ON MONTEREY COUNTY (CA) 2010 TAX AND REVENUE ANTICIPATION NOTE

Posted on: August 13, 2010, 5:43 pm

NEW YORK, Aug 13, 2010 -- Moody's Investors Service has affirmed the MIG 1 rating assigned to the California Statewide Communities Development Authority 2010 Tax and Revenue Anticipation Bonds Series 2010A-10 (County of Monterey). The affirmation reflects the issuer's proposed, possible use of an alternate maturity date, April 29, 2010, rather than the originally proposed June 30, 2010 date. Moody's believes the earlier maturity date would weaken the security for these TRANS but not sufficiency to warrant a rating change. The relative weakness results from the substantially shorter time between the final pledged repayment set-aside and the note's maturity. With an April 29, 2010, maturity date, the final pledged set-aside from 2010 receipts would occur from the first cash receipts received by the county in April. This would be a matter of weeks prior to note maturity rather than months. The county's projected cash flow, general fund cash balance, and alternate liquidity in that month are very solid, however, reflecting in part the anticipated receipt in April of the second installment of annual property taxes. Projected property tax receipts alone provide better than 2.0x coverage of the required set-aside. The credit report below is based on the original June 30, 2010, maturity date and is unchanged from the originally published report...

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