Fitch Rates Rutgers State University, NJ GO CP Notes 'F1+'
February 10 2016 - 10:04AM
Business Wire
Fitch Ratings has assigned a rating of 'F1+' to Rutgers State
University (NJ) general obligation commercial paper series A
(tax-exempt); series B (tax-exempt); series C (federally taxable)
and series D (extendable tax-exempt) (the notes).
KEY RATING DRIVERS
The 'F1+' rating is based on the liquidity support provided by
Wells Fargo Bank, National Association(Wells; rated 'AA/F1+',
Stable Outlook) in the form of a Standby Commercial Paper Purchase
Agreement (SCPPA) which has a stated expiration date of April 10,
2018 unless extended or earlier terminated and Rutgers University.
The Wells SCPPA provides coverage for the principal amount of the
notes due on the maturity dates of the notes. Rutgers University
remains obligated to pay interest upon maturity of all notes. Fitch
currently rates general obligations of Rutgers State University
'AA-', Stable Outlook (see rating action commentary dated July 29,
2015, available at 'www.fitchratings.com').
U.S. Bank National Association as the Issuing and Paying Agent
(IPA) for the notes will draw on the SCPPA whenever proceeds of the
sale of rollover notes and University revenues are insufficient to
pay maturing notes. The SCPPA provides sufficient coverage for the
$200,000,000 principal amount of notes.
The notes were issued at par, with interest due at maturity.
Following the occurrence of an event of default under the SCPPA,
Wells may direct the IPA to immediately stop the issuance of any
additional notes (a no-issuance instruction). Following the
no-issuance instruction the bank may reduce the stated amount of
the SCPPA to the amount of notes outstanding. The IPA may submit a
request for purchase to pre-fund the purchase of commercial paper
notes outstanding. In addition, the SCPPA may be terminated at
Wells Fargo's option upon the occurrence of specified termination
events. The dealers for the notes are Morgan Stanley and Bank of
America Merrill Lynch.
RATING SENSITIVITIES
The 'F1+' rating reflects the short-term rating that Fitch
maintains on the bank providing liquidity support and will be
adjusted upward or downward in conjunction with changes to the
short-term rating of the bank and in some cases, the long-term
rating of Rutgers University.
Additional information is available at www.fitchratings.com.
Applicable Criteria
Rating Criteria for Variable-Rate Demand Obligations and
Commercial Paper Issued with External Liquidity Support (pub. 28
Jan 2016)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=876837
U.S. Municipal Structured Finance Criteria (pub. 23 Feb
2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=862222
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=999306
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=999306
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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Fitch RatingsPrimary AnalystLinda FriedmanSenior
Director+1-212-908-0689Fitch Ratings, Inc.33 Whitehall StreetNew
York, NY 10004orSecondary AnalystRichard
ParkDirector+1-212-908-0289orCommittee ChairpersonMario
CivicoSenior Director+1-212-908-0796orMedia Relations:Elizabeth
Fogerty, +1 212-908-0526elizabeth.fogerty@fitchratings.com