New York, February 23, 2021 -- Moody's Investors Service ("Moody's") has affirmed the
Aa1/VMIG 1 ratings of the letter of credit backed Clark County,
Nevada Airport System (the Obligor) Subordinate Lien Revenue Bonds,
Series 2008D-2B (Non-AMT) (Weekly VRDOs) (the "Bonds") in
connection with the issuance of an alternate letter of credit (LOC) to
be provided by Barclays Bank PLC. (the "Bank").
RATINGS RATIONALE
Upon the effective date of the substitute LOC, currently scheduled
for March 3, 2021, the long-term rating will continue
to be based on joint default analysis (JDA) which reflects Moody's approach
to rating jointly supported transactions. JDA incorporates:
(i) the long-term Counterparty Risk (CR) Assessment of the Bank,
and the credit quality of the Obligor's subordinate lien pledge
of airport system revenues; (ii) the probability of default in payment
by both parties; and (iii) the structure and legal protections of
the transaction, which provide for timely debt service payments.
Moody's current long-term and short-term CR Assessments
of the Bank are A1(cr) and P-1(cr). Moody's currently maintains
an underlying rating of Aa3 on the Bonds.
Moody's has determined that the joint probability of default between the
Bank and the Obligor is low which results in credit risk consistent with
a JDA rating of Aa1 for the Bonds. Moody's assessment of the likelihood
of timely payment of purchase price is reflected in the short-term
rating of the Bonds. The short-term rating is based on the
short-term CR Assessment of the Bank.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
• Moody's upgrades the long-term CR Assessment of the Bank,
or the underlying rating of the Bonds.
• Upgrade of the short-term rating is not applicable.
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
• Moody's downgrades the long-term CR Assessment of the Bank,
or the underlying rating of the Bonds.
• Moody's assessment of the level of default dependence between the
Bank and the Obligor increases.
• Moody's downgrades the short-term CR Assessment of the Bank.
The LOC is sized to cover the current principal amount of Bonds outstanding
plus 199 days of interest at 12%, the maximum rate applicable
to the Bonds, calculated based on 365-day year, and
provides sufficient coverage for the Bonds in the daily and weekly rate
modes.
The trustee is instructed to draw on the LOC, in accordance with
its terms, in order to receive sufficient funds to make timely payment
of principal and/or interest on any principal and/or interest payment
date. In the event that the Bank fails to honor a draw on the LOC
for payment of principal and/or interest, the trustee is instructed
to utilize funds deposited by the Obligor to make such payments to bondholders
in a full and timely manner.
The trustee is also instructed to draw on the LOC, in accordance
with its terms, on each purchase date, for purchase price
to the extent remarketing proceeds are insufficient. Tendered Bonds
purchased by the Bank due to a failed remarketing are to be 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.
Prior to the expiration, termination or substitution of the LOC,
the Bonds are subject to payment funded with a draw on the LOCs.
The payment will occur upon the mandatory tender of such Bonds,
as provided below:
• Expiration: mandatory tender on the fifth (5th) business
day prior to the stated expiration date of the LOC; the stated expiration
date of the LOC is March 1, 2024.
• Substitution: mandatory tender on the substitution date.
• Interest rate conversion: mandatory tender on each interest
rate conversion date.
• Event of default under the reimbursement agreement: Upon
an event of default under the reimbursement agreement, the Bank
may, at its option, send written notice to the trustee that
such event of default has occurred with direction to cause a mandatory
tender of the Bonds. The LOC terminates on the 15th day following
the trustee's receipt of any such default notice. Upon receipt
of such notice the Bonds shall be subject to mandatory tender on the 8th
business day following trustee's receipt of such notice.
Draws for interest made under the LOC shall be automatically reinstated
by the Bank on the sixth calendar day following the honoring of such drawing
unless on or before the fifth calendar day the trustee receives notice
that the Bank has not been reimbursed in full for such drawing or an event
of default has occurred under the reimbursement agreement and as a consequence
the LOC will not be reinstated. The trustee is instructed to cause
a mandatory tender of the Bonds on the day immediately following receipt
of such notice.
The Bonds will remain in the weekly rate mode with interest payable on
January 1st and July 1st of each year. The rate on the Bonds may
be converted, in whole, to the daily, bond interest
term or long term rate mode. While in the daily mode, the
interest will be payable on the 5th business day of each month.
Moody's JDA and short-term ratings apply to Bonds in the weekly
and daily rate modes only.
Bondholders may optionally tender Bonds in the weekly mode on any business
day with seven (7) days prior notice to the trustee and the remarketing
agent. Bondholders may optionally tender Bonds in the daily mode
on any business day by providing written notice to the trustee and remarketing
agent by 10:00 a.m. on the purchase date. Bondholders
tendering the Bonds will receive purchase price equal to the par amount
of the Bonds tendered plus accrued interest to the tender date.
The principal methodology used in these ratings was Rating Transactions
Based on the Credit Substitution Approach: Letter of Credit-backed,
Insured and Guaranteed Debts published in May 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1068154.
Alternatively, please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity
analysis, see the sections Methodology Assumptions and Sensitivity
to Assumptions in the disclosure form. Moody's Rating Symbols and
Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security or pursuant
to a program for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For provisional ratings, this announcement
provides certain regulatory disclosures in relation to the provisional
rating assigned, and in relation to a definitive rating that may
be assigned subsequent to the final issuance of the debt, in each
case where the transaction structure and terms have not changed prior
to the assignment of the definitive rating in a manner that would have
affected the rating. For further information please see the ratings
tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
The ratings have been disclosed to the rated entity or its designated
agent(s) and issued with no amendment resulting from that disclosure
These ratings are solicited. Please refer to Moody's Policy
for Designating and Assigning Unsolicited Credit Ratings available on
its website www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Moody's general principles for assessing environmental, social and
governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the EU and is endorsed
by Moody's Deutschland GmbH, An der Welle 5, Frankfurt
am Main 60322, Germany, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's
office that issued the credit rating is available on www.moodys.com.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the UK and is endorsed
by Moody's Investors Service Limited, One Canada Square,
Canary Wharf, London E14 5FA under the law applicable to credit
rating agencies in the UK. Further information on the UK endorsement
status and on the Moody's office that issued the credit rating is
available on www.moodys.com.
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.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Jacek Stolarz
Asst Vice President - Analyst
Public Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Michael J. Loughlin
Vice President - Senior Analyst
Public Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
