OREANDA-NEWS. Fitch Ratings assigns an 'AA/F1+' rating to the Orlando Utilities Commission, FL's $115 million utility system revenue refunding bonds, series 2015B. The Rating Outlook is Stable for the long-term rating.

KEY RATING DRIVERS:
The long-term 'AA' rating is based on favorable system fundamentals, a record of good financial performance and sound utility operations. OUC forecasted debt service coverage is expected to approximate 2.50 times, with cash reserves maintained at healthy levels. For more information on the long-term rating, see the press release/report dated March 4, 2015, available on Fitch's website at 'www.fitchratings.com'.

The short-term 'F1+' rating is based on the liquidity support provided by TD Bank, N.A. (TD Bank, rated 'AA-/F1+', Stable Outlook), in the form of a Standby Bond Purchase Agreement (SBPA), which has a stated expiration date of Oct. 23, 2020 unless extended or earlier terminated, during the daily and weekly interest rate modes only.

The SBPA provides for the payment of the principal component of purchase price plus an amount equal to 34 days of interest calculated at a maximum rate of 12%, based on a year of 365 days for tendered bonds during the daily and weekly 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 SBPA will expire on Oct. 23, 2020, the stated expiration date, unless such date is extended; upon conversion to the commercial paper, term rate,
fixed rate, or indexed modes; 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 Orlando Utilities Commission which result in an automatic and immediate termination. The remarketing agent for the bonds is Goldman, Sachs & Co. The bonds are expected to be delivered on or about Oct. 23, 2015.

The bonds will be issued in the weekly rate mode, but may be converted to a daily, commercial paper, term rate, fixed rate, or indexed mode. While bonds bear interest in the daily and weekly rate mode, interest is paid on the first business day of each month, commencing Nov. 2, 2015. Holders of bonds bearing interest in the daily and weekly rate mode may tender their bonds for purchase with the requisite prior notice. The trustee/tender agent is obligated to make timely draws on the SBPA to pay purchase price in the event of insufficient remarketing proceeds, and in connection with the expiration or termination of the SBPA, except in the case of the credit-related events permitting immediate termination or suspension of the SBPA.

Funds drawn under the SBPA are held uninvested and are free from any lien prior to that of the bondholders. The bonds are subject to mandatory tender: (1) upon conversion of the interest rate to a mode other than the daily or weekly mode; (2) upon expiration, substitution or termination of the SBPA; and (3) following the receipt of written notice from the bank of an event of default under the SBPA, directing such mandatory tender. Optional and mandatory redemption provisions also apply to the bonds.

Bond proceeds will be used to refund OUC's series 2009A utility system revenue bonds.

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 bond obligor. The long-term rating is exclusively tied to the creditworthiness of the bond obligor and will reflect all changes to that rating.