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MOODY'S UPGRADES TO Aa2 FROM Baa1 THE LONG-TERM LETTER OF CREDIT-BACKED RATING TO CONVERSE COUNTY, WYOMING POLLUTION CONTROL REVENUE REFUNDING BONDS (PACIFICORP PROJECT) SERIES 1992; ASSIGNS SHORT-TERM VMIG 1 RATING

22 Sep 2010

$22.485 MILLION IN DEBT AFFECTED, LETTER OF CREDIT PROVIDED BY WELLS FARGO BANK, N.A.

PacifiCorp
Fully Supported
WY

Moody's Rating

ISSUE

RATING

Ser. 1992

Aa2/VMIG 1

  Sale Amount

$22,485,000

  Expected Sale Date

09/22/10

  Rating Description

DIRECT PAY LOC

 

Opinion

NEW YORK, Sep 22, 2010 -- Moody's Investors Service has upgraded the long-term rating to Aa2 from Baa1 and assigned a short-term rating of VMIG 1 to Converse County, Wyoming Pollution control Revenue Refunding Bonds (PacifiCorp Project) Series 1992 (the Bonds) in conjunction with the addition of a letter of credit scheduled to occur on September 22, 2010.

RATINGS RATIONALE

Upon the addition of the letter of credit, the rating will be based upon (i) the letter of credit (LOC) provided by Wells Fargo Bank, N.A. (the Bank), (ii) the structural and legal protections of the transaction which ensures timely payment of debt service and purchase price to bondholders, and, (iii) Moody's evaluation of the credit quality of the Bank.

Moody's currently rates the Bank Aa2 for its long-term obligations and Prime-1 for its short-term obligations.

Interest Rate Modes and Payment

The Bonds will continue to bear interest at a weekly rate and pay interest on the first business day of each month. The Bonds may be converted in whole to bear interest at the daily, term or flexible rate modes and are subject to mandatory tender at a price of par plus accrued interest upon conversion. The initial rating will cover the Bonds in the daily and weekly rate modes and will expire upon conversion to any other rate mode. While in the daily rate mode, the Bonds will pay interest on the first business day of each month.

Additional Bonds

The indenture does not permit the issuance of additional bonds.

Flow of Funds

The trustee is instructed to draw under the LOC for principal or interest in accordance with the LOC to pay principal and interest when due. The trustee is instructed to draw under the LOC, on each purchase date, for purchase price, to the extent remarketing proceeds are insufficient. Bonds which 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 in the amount of the purchase price drawn for such Bonds.

Letter of Credit

The LOC is sized for full principal plus 48 days of interest at the maximum rate applicable to the Bonds (12%) and will provide coverage for Bonds while they bear interest in only the daily or weekly rate mode. The LOC is subject to the Uniform Customs and Practice for Documentary Credits (2007 Revision), Publication No. 600 of the ICC.

Draws on the Letter of Credit

Conforming draws for principal and/or interest presented to the Bank at or before 3:00 p.m., Eastern Time (ET), on a business day, will be honored by the Bank on or before 1:00 p.m. on the next business day. Conforming draws for purchase price presented to the Bank at or before 12:00 p.m., ET, on a business day, will be honored by the Bank on or before 2:30 p.m. on the same business day.

Reinstatement of Interest Draws

Draws made under the LOC for interest shall be automatically reinstated on the 8th business day following the date such drawing is honored by the Bank unless the trustee receives notice from the Bank no later than 7 business days following said day indicating the LOC will not reinstate. Upon receipt thereof, the trustee shall effect a mandatory tender of the Bonds on the business day following receipt of such notice.

Reimbursement Agreement Defaults

The Bank has no Bond remedies as a result of an event of default under the credit agreement.

Indenture of Trust Events of Default Related to Payments

Upon a failure to pay when due and payable the principal, interest or purchase price on the Bonds, the trustee shall declare an acceleration of the Bonds if the Bank directs the trustee to accelerate the Bonds (interest shall cease to accrue no later than 2 business days following such declaration).

Expiration/Termination of the Letter of Credit

The LOC shall terminate on September 22, 2011, unless extended.

Substitution

The Bonds will be subject to mandatory tender on the business day preceding the effective date of the substitute LOC. Draws for purchase price upon the substitution of the LOC will be made under the existing LOC.

Optional Tenders

Bondholders may optionally tender their Bonds during (a) the daily rate mode on any business day provided written notice is delivered to the trustee and remarketing agent by 11:00 a.m., ET on the purchase date; (b) the weekly rate mode on any business day with seven days prior written notice to the trustee.

Mandatory Purchases

The Bonds are subject to mandatory tender on the following dates: (1) the interest conversion date; (2) on the business day preceding the expiration or termination of the LOC; (3) on the business day preceding the substitution of the LOC; and, (4) the business day following the trustee's receipt of notice from the Bank indicating the LOC will not reinstate.

Mandatory Redemptions

The Bonds are subject to mandatory redemption upon the occurrence of a determination of taxability.

Last Rating Action

The last rating action on the Bonds occurred on March 31, 2005 when the rating of Baa1/P-2 was assigned to the Bonds.

What Could Change the Rating-Up

Long-term: The long-term rating on the Bonds would be raised if the long-term other senior obligation (OSO) rating on the Bank was upgraded.

Short-term: Not applicable.

What Could Change the Rating-Down

Long-term: The long-term rating on the Bonds would be lowered if the long-term OSO rating on the Bank was downgraded.

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

Key Contacts

Trustee: The Bank of New York Mellon Trust Company

Remarketing Agent and Underwriter: JPMorgan Securities Inc.

METHODOLOGY

The principal methodology used in rating this issue was Moody's Rating Methodology for Leter of Credit Supported Transactions rating methodology published in August 2005. Other methodologies and factors that may have been considered in the process of rating this issue can also be found on Moody's website.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings and public information

Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating.

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.

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

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service 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 the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.

Analysts

Lawrence Bellinger
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
250 Greenwich Street
New York, NY 10007
USA

MOODY'S UPGRADES TO Aa2 FROM Baa1 THE LONG-TERM LETTER OF CREDIT-BACKED RATING TO CONVERSE COUNTY, WYOMING POLLUTION CONTROL REVENUE REFUNDING BONDS (PACIFICORP PROJECT) SERIES 1992; ASSIGNS SHORT-TERM VMIG 1 RATING
No Related Data.
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