Fitch Rates California Municipal Finance Authority VRDBs Goodwill Industries 2008 'AA/F1+'

2008-10-24 22:48:02 -

- Fitch Ratings assigns a rating of 'AA/F1+' to the California Municipal Finance Authority's $7,700,000 variable rate demand revenue bonds (Goodwill Industries of Orange County, California), series 2008.

The rating is based on the support provided by an irrevocable direct-pay letter of credit (LOC) issued by Wells Fargo Bank, National Association, securing the bonds. The bank is obligated to make payments of principal of and interest on the bonds, as well as the purchase price for tendered bonds. The rating will expire upon the earliest of: (a) Oct. 30, 2011, the stated expiration date of the LOC; (b) any prior termination of the LOC; and (c) 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, and purchase price for tendered bonds. The remarketing agent for the bonds is Wells Fargo Brokerage Services, LLC. The bonds are expected to be available for delivery on or about Oct. 30, 2008.

The bonds initially bear interest at the weekly interest rate, but may be converted to a term interest rate mode. The first interest payment date is Nov. 1, 2008, and thereafter interest will be paid on the first calendar day of each month, while bonds bear interest in the weekly rate mode.

Holders have the option to tender their bonds on any business day during the weekly interest mode, following required advance notice. The bonds are subject to mandatory tender as follows:

--Upon conversion of the interest rate mode;

--On the effective date of a substitute LOC;

--Five days prior to the expiration of the LOC if it is not renewed pursuant to its terms;

--Within four days of receipt of notice from the LOC Bank of non-reinstatement of the LOC following an interest drawing;

--Within five business days of receipt of notice from the Bank that an event of default has occurred under the reimbursement agreement.

Optional redemption provisions also apply to the bonds.

Bond proceeds will be used to finance and refinance the acquisition, construction, improvement and equipping of certain facilities of Goodwill Industries of Orange County, California in the cities of Anaheim and Santa Ana, California.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. 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.

Fitch Ratings, New York
Trudy Zibit, +1-212-908-0689
Cindy Stoller, +1-212-908-0526 (Media Relations)
cindy.stoller@fitchratings.com