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

Defeasanceexisting rating on the obligor’s long-term debt unlessStandard & Poor’s receives legal comfort on thebankruptcy concerns outlined above.If these opinions cannot be provided, the highestrating that can be achieved is the long-term ratingon the depositor.Standard & Poor’s will not rate economicallydefeased debt for corporations, partnerships, orother similar issuers higher than such entities’long-term rating. Although the entity has setaside sufficient funds to satisfy the obligation,the debt has not been legally discharged and,therefore, in the event of an insolvency of suchentity, the escrow funds may be considered partof the bankruptcy estate, and payments to thebondholders may be interrupted. If a special purposeentity (SPE) that meets Standard & Poor’sSPE criteria is used and the appropriate bankruptcyopinions are delivered, a higher ratingmay be achievable. ■www.standardandpoors.com59