SOLID DEBT SERVICE COVERAGE: The series 2011 transaction reduced system's bank exposure and the level of capital appreciation bond
accretion, with variable rate debt at under 10% of outstanding long term debt.
The 2005A, 2005B, and 2008B capital appreciation bond
(CAB) are also being affirmed at 'BBB', 'BBB-', and 'B+', respectively; however, the model output for these bonds corresponds to ratings one notch lower than the current ratings and they may be downgraded depending on the amount of the 2011 MSA payment received.
The 2006A capital appreciation bond
(CAB) is being downgraded to 'BB-' from 'BBB-', the 2006B CAB is being downgraded to 'B+' from 'BBB-', and the 2006C CAB is being downgraded to 'B+' from 'BB'.
The 2006B capital appreciation bond
(CAB) is being affirmed at 'BBB' with a Stable Outlook which is consistent with the model output.
In the case of 2046 turbo bone and the 2046B capital appreciation bond
(CAB), the ratings are affirmed at 'BBB+' and 'BBB', respectively; however, the model output suggests that the bonds are under pressure with breakeven levels indicative of lower ratings.
The 2005 S1 capital appreciation bond
(CAB) is being affirmed at 'BBB' with a Stable Outlook while the 2005 S2 is being upgraded from 'BBB-' to 'BBB' with a Stable Outlook.
Much of the concern about school district debt has focused on the use of a controversial financing tool called capital appreciation bonds
, or CABs.
10, 1998 and are being issued as capital appreciation bonds
maturing on Feb.
8 million GO convertible capital appreciation bonds
, series 2013-A;
The turbo and capital appreciation bonds
were put on Rating Watch Negative in July 2012 with the expectation that the change in the base case assumption could lead to downgrades.
1, and will include $96,190,000 series 1998A current interest bonds due 1999-2013, $209,010,000 series 1998B of which $191,400,000 are current interest bonds due 1999-2012 and 2014-2015 ($17,610,000 capital appreciation bonds
will be due in 2013), and $14,910,000 series 1998C of which $12,945,000 are current interest bonds due 1999-2006 with $1,965,000 capital appreciation bonds
Dated as of the issuance date, the capital appreciation bonds
will pay interest each June 1 and December 1, commencing June 1, 1999.