S&P - Public Finance Criteria (2007). - The Global Clearinghouse

Municipal Structured FinanceCriteria Outline for Bank-Supported Municipal DebtVII. MiscellaneousI. Preference-proofed monies (issuer and/or obligors not bankruptcy-remote)A. Available monies/eligible funds for payments not derived from credit and liquidity facilities.B. Remarketing proceeds prohibited from issuer and obligor(s).C. Preference opinion covering all payment events except defeasance not paid with available monies/eligible funds.II. Payment eventsA. Regularly scheduled principal & interest.1. All interest rate modes described in detail2. Adequate interest coverage provided by bank:a.) Maximum days in longest rate period covered, plusb.) Number of calendar days required to reinstate interest coverage after a draw on the bank facility, plusc.) Number of calendar days required to take out bondholders through mandatory tender, mandatory redemption,or acceleration following receipt of bank notice of interest nonreinstatementB. Mandatory tender1. Mandatory tenders described in detail2. Sources of paymentC. Optional tender (puts)1. Put options described in detail2. Sources of paymentD. Mandatory redemption1. Mandatory redemption events described in detail2. Sources of paymentE. Optional redemption (calls)1. Mandatory redemption events described in detail2. Sources of payment3. Premiums not covered by credit facility, if any:a.) On hand at time of call notice to bondholdersb.) Investment options adequate to support ratingF. Acceleration1. Events of default and remedies described2. Specify when interest ceases to accrue3. Sources of paymentG. Defeasance1. New preference opinion required at time of legal defeasance if issuer and obligor(s) are not bankruptcy-remote2. Standard & Poor’s rating maintenance required for variable-rate defeasance3. Acceptable defeasance securities:a.) Cashb.) U.S. government obligationsi.) U.S. Treasury obligationsii.) Agency obligations fully guaranteed by U.S.iii.) Obligations of certain agencies sponsored by U.S. governmentc.) Securities rated ‘AAA’ refunded with U.S. government obligationsIII.Required bondholder takeouts(mandatory tender, mandatory redemption, or acceleration)A. Interest nonreinstatement following credit facility drawB. Bank facility expirationC. Replacement of bank facility without rating maintenanceD. Receipt of bank notice of event of default and termination of bank facility210 Standard & Poor’s Public Finance Criteria 2007