OREANDA-NEWS. Fitch Ratings has assigned an 'AA-/F1+' rating to the $7,000,000 Toledo-Lucas County Port Authority variable rate demand economic development revenue bonds, series 2006 (Van Deurzen Dairy, LLC Project). The Outlook for the long-term rating is Stable.

KEY RATING DRIVERS

The rating is based on the support provided by an irrevocable direct-pay letter of credit (LOC) issued by Agribank, FCB (rated 'AA-/F1+'; Stable Outlook), which has an initial stated expiration date of Dec. 22, 2016, unless such date is extended or earlier terminated, while the bonds are in the variable rate (weekly) interest rate mode only. Fitch is assigning a rating to the bonds for the first time in connection with the provision of the LOC, which becomes effective on Dec. 22, 2015.

The 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 LOC provides full and sufficient coverage of principal plus an amount equal to 109 days of interest at a maximum rate of 10% based on a year of 365 days and purchase price for tendered bonds, while in the weekly rate mode. The Remarketing Agent for the bonds is The Frazer Lanier Company, Inc. The bonds are expected to be remarketed on Dec. 22, 2015.

The bonds will 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 Thursday of each February, May, August and November. The trustee is obligated to make timely draws on the LOC to pay principal, interest, and purchase price. Funds drawn under the LOC are held uninvested or may be invested in accordance with rating guidelines 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 substitution of the LOC. The bonds are subject to mandatory redemption upon the expiration or termination of the LOC. The bonds shall be accelerated following trustee's receipt of notice of an event of default under the reimbursement agreement and non-reinstatement of the LOC interest. Additional optional and mandatory redemption provisions also apply to the bonds. There are no provisions for the issuance of additional bonds.

Bond proceeds were used to finance the acquisition, improvement and equipping of certain solid waste disposal components of the borrower's dairy facilities.

RATING SENSITIVITIES
The rating is exclusively tied to the short and long-term rating that Fitch maintains on the bank providing the substitute LOC and will reflect all changes to that rating.