OREANDA-NEWS. Fitch Ratings has taken the following rating actions on the New York City Municipal Water Finance Authority (NYW) second general resolution revenue bonds, adjustable rate fiscal 2007 series CC:

--$160,500,000 subseries CC-1 bonds (CC-1 bonds) short-term rating downgraded to 'F1' from 'F1+';

--$50,000,000 subseries CC-2 bonds (CC-2 bonds) short-term rating affirmed at 'F1+'.

The short-term rating actions are in connection with: (i) the substitution of the liquidity support previously provided by The Bank of Nova Scotia (rated 'AA-/F1+'), acting through its New York agency, in the form of a Standby Bond Purchase Agreement (SBPA), with a substitute revocable standby letter of credit (SLOC) issued by Sumitomo Mitsui Banking Corporation (SMBC; rated 'A/F1', Negative Outlook), acting through its New York branch, in support of the CC-1 bonds and a substitute SBPA issued by the Bank of Montreal (rated 'AA-/F1+', Stable Outlook), acting through its Chicago branch, in support of the CC-2 bonds; and (ii) the mandatory tender of the bonds.

KEY RATING DRIVERS

NYW's long-term 'AA+' rating continues to reflect its legal framework, including its bankruptcy remote status, exceptionally large, diverse and economically important service area, its independent rate-setting authority, strong financial and capital program management, sound financial metrics, and high debt levels. For more information on Fitch's long-term rating on NYW, see the press release 'Fitch Rates New York City Muni Water Finance Authority's $200MM Revs 'AA+'; Outlook Stable' dated Sept. 16, 2016, available on Fitch's web site at 'www. fitchratings. com'.

The short-term 'F1' rating on the CC-1 bonds is based on the liquidity support provided by SMBC, in the form of a substitute SLOC, which has a stated expiration date of Oct. 5, 2021 unless extended or earlier terminated, during the weekly interest rate mode only. The short-term 'F1+' rating on the CC-2 bonds is based on the liquidity support provided by BMO, in the form of a substitute SBPA, which has a stated expiration date of Oct. 5, 2020 unless extended or earlier terminated, during the daily, weekly and two-day interest rate modes only. The long-term rating continues to be based on the rating assigned to the bonds. The Rating Outlook is Stable for the long-term rating.

The substitute SMBC SLOC provides for the payment of the principal component of purchase price plus an amount equal to 35 days of interest calculated at a maximum rate of 9%, based on a year of 365 days for tendered bonds during the weekly rate mode in the event that the proceeds of a remarketing of the bonds are insufficient to pay the purchase price following an optional or mandatory tender. The substitute SMBC SLOC will expire on Oct. 5, 2021, the stated expiration date, unless such date is extended; upon conversion to any mode other than weekly; or upon the occurrence of certain events of default which result in a mandatory tender or other events of default related to the credit of the bonds which result in an automatic and immediate termination.

The substitute BMO SBPA provides for the payment of the principal component of purchase price plus an amount equal to 35 days of interest calculated at a maximum rate of 9%, based on a year of 365 days for tendered bonds during the daily, weekly and two-day rate modes in the event that the proceeds of a remarketing of the bonds are insufficient to pay the purchase price following an optional or mandatory tender. The substitute BMO SBPA will expire on Oct. 5, 2020, the stated expiration date, unless such date is extended; upon conversion to any mode other than daily, weekly or two-day; or upon the occurrence of certain events of default which result in a mandatory tender or other events of default related to the credit of the bonds which result in an automatic and immediate termination.

A mandatory tender of the CC-1 and CC-2 bonds has occurred. The remarketing agent for the CC-1 bonds is Merrill Lynch, Pierce, Fenner & Smith Incorporated. The remarketing agent for the CC-2 bonds is Raymond James & Associates, Inc.

RATING SENSITIVITIES

The short-term rating reflects the short-term rating that Fitch maintains on the bank providing liquidity support, and will be adjusted upward or downward in conjunction with the short-term rating of the bank and, in some cases, the long-term rating of the bonds. The long-term rating is exclusively tied to the creditworthiness of the bonds and will reflect all changes to that rating.