2008-11-17 23:43:02 -

Fitch Ratings assigns an 'A+/F1' to the City of Los Angeles Industrial Development Authority variable-rate demand (VRD) industrial development revenue bonds (KH Enterprises LLC) series 2008.
The rating is based on the support provided by an irrevocable, direct-pay letter of credit (LOC) issued by Comerica Bank, securing the bonds. 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, Nov. 1, 2013; any prior termination of the LOC; and defeasance of the bonds. The LOC provides full coverage of principal plus an amount equal to 45 days' interest at a maximum rate

of 12% based on a 365-day year. The remarketing agent for the bonds is First Southwest Company. The bonds are expected to be delivered on or about Nov. 25, 2008.
The bonds initially bear interest at the weekly rate mode, but may be converted to a fixed interest rate mode. While bonds bear interest in the weekly rate mode, interest payments are made on the first business day of each month, commencing Jan. 2, 2009. During the weekly rate mode, bondholders may tender their bonds on any business day, provided the trustee is given seven days' prior notice of the purchase. The bonds are subject to mandatory tender upon substitution of the LOC and upon conversion of the interest rate mode. The bonds are subject to mandatory redemption upon expiration of the LOC, upon an event of default under the reimbursement agreement, and upon non-reinstatement of the interest component of the LOC. Other optional and mandatory redemption provisions also apply to the bonds.
The bond proceeds will be used to finance the cost of acquiring and renovating an approximately 16,800 square foot building and related land. The building will be leased to Drapes 4 Show, Inc., an affiliate of the borrower, and used in the manufacture of textile items such as table or stage skirting, table linens, placemats, throw covers, and drop-covers that are primarily used in the hospitality, convention and audio/visual industries, all located in Los Angeles, California.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ... Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.


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