Southeastern California Conference Rated for $20,290,000 in Bonds

Fitch Ratings assigns a rating of ‘AA/F1+’ to the $20,290,000 Southeastern California Conference of Seventh-Day Adventist adjustable rate demand taxable revenue bonds, series 2008. The rating is based on the support provided by an irrevocable, direct-pay letter of credit (LOC) issued by Bank of America, N.A securing the bonds (the long-term ‘AA’ rating of Bank of America is on Rating Watch Negative as of March 7, 2008). The bank is obligated to make payments of principal and interest when due, as well as purchase price for tendered bonds. The rating will expire upon the earliest of: the stated expiration date of the LOC, June 19, 2011, unless such date is extended; any prior termination of the LOC; and defeasance of the bonds. The LOC provides full coverage of principal plus an amount equal to 34 days’ interest at a maximum rate of 12% based on a 365-day year. The remarketing agent for the bonds is Ziegler Capital Markets Group. The bonds are expected to be delivered on or about June 19, 2008.

A decent rating, but does anyone know for what this bond issue will be used?

Euroinvestor says: ” The bond proceeds will be used to finance or refinance certain church and / or educational facilities of the Issuer.”