Fitch Rates $10MM California Enterprise Dev Auth (Ramar International) 2008 A&B VRDBs 'AA-/F1+'

2008-11-10 05:46:02 -

- Fitch Ratings assigns an 'AA-/F1+' to the California Enterprise Development Authority variable rate demand industrial development revenue bonds (Ramar International Corporation Project), consisting of: $8,220,000 for tax-exempt series 2008A and $1,780,000 for the taxable series 2008B.

The rating is based on the support provided by an irrevocable, direct-pay letter of credit (LOC) issued by Bank of the West, 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. 13, 2013, unless such date is automatically extended for additional five year periods; any prior termination of the LOC; and defeasance of the bonds. The LOC provides full coverage of principal plus an amount equal to 120 days' interest at a maximum rate of 12% based on a 365-day year. The remarketing agent for the bonds is Gates Capital Corporation. The bonds are expected to be delivered on or about Nov. 13, 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 Dec. 1, 2008. 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 interest non-reinstatement of the LOC. Other optional and mandatory redemption provisions also apply to the bonds.

The bond proceeds will be used to finance and/or refinance the cost of or reimburse the borrower for acquiring, improving, and equipping food processing facilities to be located Pittsburg, California.

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