Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Rating Update:

MOODY'S AFFIRMS THE Aa1/VMIG 1 LETTER OF CREDIT BACKED RATINGS OF THE SIMMONS COLLEGE BONDS, SERIES 2008

01 Sep 2011

$16.555 MILLION OF DEBT AFFECTED. SUBSTITUTE LETTER OF CREDIT PROVIDED BY TD BANK, N.A.

Fully Supported
MA

Opinion

NEW YORK, Sep 1, 2011 -- Moody's Investors Service has affirmed the Aa1/VMIG 1 the letter of credit backed rating assigned to the Simmons College Bonds, Series 2008 (the "Bonds") in conjunction with the substitution of the current letter of credit securing the Bonds provided by JPMorgan Chase Bank, N.A. with a new direct-pay letter of credit ("LOC") provided by TD Bank, N.A. (the "Bank") effective September 1, 2011.

SUMMARY RATING RATIONALE

The long-term rating is based on a joint default analysis ("JDA") which reflects Moody's approach to rating jointly supported transactions. The JDA ratings are based upon the long term rating of the Bank as the provider of the substitute LOC; the underlying rating of the Bonds; and the structure and legal protections of the transaction, which ensures timely debt service payments to investors. The timely payment of purchase price is reflected in the short-term rating of the Bonds. The short-term rating of the Bond is based upon the short-term rating of the Bank as providers of the LOC. Moody's currently rates the Bank Aa2 for long-term other senior obligations ("OSO") and P-1 for short-term OSO. Moody's currently maintains an underlying rating of Baa1 for Simmons College (the "College"). Please see the rating update report dated August 5, 2011 for more information on the underlying rating of the Bonds.

Since a loss to investors would occur only if both the Bank and the College default in payment, Moody's has assigned the long-term portions of the ratings based upon the joint probability of default by both parties. In determining the joint probability of default, Moody's considers the level of default dependence between the Bank and the College. Moody's has determined that there is a low level of default dependence between each of the Bank and the College. As a result, the joint probability of default for the Bank and the College, results in a credit risk consistent with a JDA rating of Aa1 for the Bonds.

DETAILED CREDIT DISCUSSION

Interest Rate Modes and Payment

The Bonds will continue to bear interest in a weekly rate mode and interest will be paid on the first business day of each month. The trust indenture permits the conversion of the interest rate of the Bonds, in whole or in part, to a term or fixed mode. The Bonds will be subject to mandatory tender upon conversion of interest rate mode. Moody's JDA and short term ratings only apply to the Bonds while bearing interest in the weekly interest rate.

Additional Bonds

The trust indenture does not allow the issuance of additional Series 2008 Bonds.

Flow of Funds

The trustee is instructed to draw under the LOC by 4:00 p.m., Eastern time, on the business day prior to each principal and/or interest payment date in order to receive timely payment. The trustee is also instructed to draw under the LOC by 10:00 a.m., Eastern time, on business day each purchase date based on notice of remarketing proceeds received by the remarketing agent. To the extent remarketing proceeds delivered to the trustee are insufficient, the trustee is instructed to make a second drawing on the LOC by 11:30 a.m., Eastern time on the purchase date.

In the event that the Bank wrongfully fails to honor any draw under the letter of credit, the trustee is instructed to apply College funds on deposit in order to make such payments to bondholders in a full and timely manner.

Bonds that are purchased by the Bank due to a failed remarketing are held by the trustee and will not be released until the trustee has received confirmation from the Bank stating that the LOC has been reinstated for the full amount of the purchase price drawn for such Bonds.

Direct Pay Letter of Credit

The LOC provided by the Bank is sized for the full principal amount plus 45 days of interest at the maximum interest rate of 12%. The LOC provides sufficient coverage for the Bonds while they bear interest in the weekly rate mode.

Draws on Letter of Credit

Conforming draws under the LOC for principal and interest received by the Bank at or prior to 4:00 p.m., Eastern time, on a business day, will be honored by 1:00 p.m., Eastern time, on the following business day. Conforming draws for purchase price received by the Bank by 11:30 a.m., Eastern time, on a business day, will be honored by the Bank by 2:30 p.m., Eastern time, on the same business day.

Reinstatement of Interest Draws

Draws made under the LOC for interest shall be automatically reinstated on the 11th day following the Bank's honoring any such interest drawing unless the trustee receives notice from the Bank of an event of default under the reimbursement agreement and the non-reinstatement of the LOC by 12:00 p.m.., Eastern Time, on the tenth (10th) day following such a drawing. Upon receipt of such notice, the trustee is directed to immediately accelerate the maturity of the Bonds. Interest ceases to accrue at such declaration.

Substitution

Substitution of the LOC is permitted and requires a mandatory tender of the Bonds on the interest payment date prior to the date the substitute LOC will go into effect, unless the trustee receives written confirmation that the rating on the Bonds will not be reduced or withdrawn based on the substitution of the LOC . On such mandatory tender date, the trustee shall draw under the existing LOC for full purchase price of the corresponding Bonds, to the extent remarketing proceeds are not available, and shall not surrender the existing LOC to the Bank until after all draws have been honored.

Reimbursement Agreement Defaults

The Bank may deliver written notice to the trustee stating that an event of default under the reimbursement agreement has occurred and is continuing and directing the acceleration of the Bonds. The trustee shall immediately accelerate the maturity of the Bonds and draw on the LOC. Interest will cease to accrue on the date of such declaration.

Expiration / Termination of the Letter of Credit

Each LOC expires upon the earliest to occur of: (1) the Bank's honoring of the final drawing under the LOC; (2) on the Bank's receipt of the trustee's certification that a substitute LOC has gone into effect; (3) on the business day following the Bank's receipt of notification from the trustee that all the Bonds have been converted to a rate mode other than weekly; or (4) September 1, 2016, the stated termination date.

Optional Tenders

While the Bonds are in the weekly rate mode, bondholders may optionally tender their Bonds on any business day, by providing written notice to the tender agent and the remarketing agent at least seven days in advance. Bondholders tendering their Bonds will receive purchase price equal to the par amount of the Bonds tendered plus accrued interest to the tender date.

Mandatory Tenders

The Bonds are subject to mandatory tender on the following dates: (1) the interest payment date prior to the expiration or termination of the LOC; (2) the interest payment date prior to the substitution of the LOC unless the trustee receives rating confirmation; and (3) on any conversion of interest rate date.

Mandatory Redemption

The Bonds are subject to mandatory sinking fund redemptions.

WHAT COULD CHANGE THE RATING-UP

Long - Term: The long-term ratings on the Bonds could be raised if the long-term OSO rating of the Bank was upgraded or the long-term underlying rating of the Bonds was upgraded.

Short-Term: not applicable

WHAT COULD CHANGE THE RATING - DOWN

Long-Term: The long-term ratings on the Bonds could be lowered if the long-term OSO rating of the Bank was downgraded, or if there is an increase in the level of default dependence between the Bank and the College.

Short-Term: The short-term OSO rating on the Bonds could be lowered if the short-term rating of the Bank was downgraded.

Key Contacts

Trustee: The Bank of New York Mellon Trust Company, N.A.

Remarketing Agent: Barclays Capital

The last rating action on the Bonds took place on August 3, 2011 when the Aa1 long term rating was confirmed.

PRINCIPAL METHODOLOGIES USED

The principal methodologies used in this rating were Applying Global Joint Default analysis to Letter of Credit Backed Transactions in the U.S. Public Finance Sector published in October 2010 and Moody's Methodology for Rating U.S. Public Finance Transactions Based on the Credit Substitution Approach published in August 2009.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Analysts

Josephine Castro
Analyst
Public Finance Group
Moody's Investors Service

Robert Azrin
Senior Credit Officer
Public Finance Group
Moody's Investors Service

Contacts

Journalists: (212) 553-0376
Research Clients: (212) 553-1653


Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
USA

MOODY'S AFFIRMS THE Aa1/VMIG 1 LETTER OF CREDIT BACKED RATINGS OF THE SIMMONS COLLEGE BONDS, SERIES 2008
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​
Moodys.com