OREANDA-NEWS. Fitch Ratings has assigned a rating of 'AAA/F1+'to the $5,275,000 Foundation Properties, Inc. variable rate taxable bonds (One Arsenal Place Project) Series 2015. The Rating Outlook for the long-term rating is Stable.

KEY RATING DRIVERS

The rating is based on the support provided by an irrevocable confirming letter of credit (CLOC) issued by Federal Home Loan Bank of Atlanta (FHLB, rated 'AAA/F1+'; Stable Outlook), which confirms an irrevocable direct-pay letter of credit issued by Synovus Bank (rated 'BB+/B'; Positive Outlook). The CLOC has an initial stated expiration date of Sept, 15, 2016, with automatic annual extensions until Sept. 20, 2020. The LOC has an initial stated expiration date of Sept., 15, 2020, unless such date is extended. The CLOC and LOC cover bonds in the variable (weekly) interest rate mode only.

The LOC bank is obligated to make regularly scheduled payments of principal of and interest on the bonds in addition to payments due upon maturity, acceleration and redemption, as well as purchase price for tendered bonds. The CLOC bank is obligated to make a payment for all outstanding bonds including interest in the event the LOC bank fails to honor any draw or repudiates its obligations under the LOC. The LOC provides full and sufficient coverage of principal plus an amount equal to 36 days of interest at a maximum rate of 10% based on a year of 360 days and purchase price for tendered bonds, while in the weekly rate mode. The CLOC provides the same full and sufficient coverage as the LOC. The Remarketing Agent for the bonds is Synovus Securities, Inc. The bonds are expected to be available on or about Sept. 24, 2015.

The bonds initially bear interest at a weekly rate, but may be converted to a fixed rate. While bonds bear interest in the weekly rate mode, interest payments are on the first business day of each month, commencing Oct. 1, 2015. The trustee is obligated to make timely draws on the LOC to pay principal, interest, and purchase price. In the event the LOC bank fails to honor a draw or repudiates its obligations under the LOC, all of the bonds shall be subject to mandatory purchase and the trustee shall immediately draw on the confirming letter of credit for all of bonds outstanding. Funds drawn under the LOC are held uninvested and are free from any lien prior to that of the bondholders.

Holders may tender their bonds on any business day, provided the trustee and remarketing agent are given the requisite prior notice of the purchase. The bonds are subject to mandatory tender: (1) upon conversion of the interest rate to a fixed rate mode; or (2) upon expiration, substitution or termination of the LOC or CLOC. Optional and mandatory redemption provisions also apply to the bonds. There are no provisions for the issuance of additional bonds.

Bond proceeds will be used to refinance a loan, the proceeds of which were used to finance the cost of rehabilitation and equipping of certain property commonly known as "One Arsenal Place".

RATING SENSITIVITIES

The rating is exclusively tied to the short and long-term rating that Fitch maintains for the bank providing the CLOC and will reflect all changes to that rating.