Fitch Rates $76.9MM NC Muni Power Agency #1 Refunded Bonds 'AAApre'

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has assigned a 'AAApre' rating to the $76,955,000 North Carolina Municipal Power Agency Number 1 Catawba Electric Revenue Bonds, refunding series 2009A, maturing Jan. 1, 2022-2030 (partial refundings of all maturities). The Rating Outlook is Stable. The refunded bonds will be redeemed on Jan. 1, 2019 at par plus accrued interest.

KEY RATING DRIVERS

The 'AAApre'/Stable Outlook rating is based on the pledge of securities in the irrevocable trust fund securing the bonds and reflects the express lien of the refunded bondholders on the funds and securities deposited irrevocably and that all amounts have been invested in direct non-callable obligations of the United States and direct non-callable senior unsubordinated obligations of the Federal Home Loan Bank (FHB) and the Federal Farm Credit Bank. The U.S. full faith and credit is currently rated 'AAA'/Stable Outlook. As a government supported enterprise (GSE), the Federal Farm Credit Bank is also rated 'AAA'/Stable Outlook by Fitch.

The bonds were refunded with proceeds of the issuer's $69,380,000 Catawba Electric Revenue Bonds, refunding series 2016A (sold at a premium) as well as amounts released from the bond funds and reserve funds previously securing the refunded bonds. The ratings apply to the bonds listed by CUSIP number, below.

Pursuant to an irrevocable refunding trust agreement, U.S. Bank National Association (rated 'AA/F1+'/Stable Outlook), as trustee, holds a separate special irrevocable trust fund, in trust for the benefit of the refunded bondholders. All cash and securities held in this fund are pledged irrevocably to the payment of principal and interest on the refunded bonds when due. In the future, Fitch will review any proposed substitution or reinvestment of funds, which may only occur following receipt of confirmation that the action will not result in a reduction or withdrawal of the ratings on the refunded bonds.

Causey Demgen & Moore PC verified the mathematical accuracy of computations relating to the adequacy of cash and securities deposited in the refunding trust fund to pay debt service requirements of the refunded bonds. In the their opinion, cash and securities deposited in the refunding trust fund will produce amounts necessary to provide for timely payment of the related refunded bonds. Prior to accepting substitute investment securities or disbursing excess funds to the issuer, the trustee must receive a new report verifying the continued sufficiency of escrowed funds to meet all future payments of principal and interest on the refunded bonds.

RATING SENSITIVITIES

The rating is currently tied to the U.S. sovereign creditworthiness and will reflect all changes to that rating.

The 'AAApre' rating applies to the bonds with the following CUSIP numbers:

6582034P6

6582034Q4

6582034R2

6582034S0

6582034T8

6582034U5

6582034V3

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria

Guidelines for Rating Prerefunded U.S. Municipal Bonds (pub. 09 Dec 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=818549

U.S. Municipal Structured Finance Criteria (pub. 23 Feb 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=862222

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1000752

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1000752

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160310006450/en/

Fitch Ratings
Primary Analyst
Janet Rosen
Analytical Consultant
+1-312-368-3172
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Linda Friedman
Senior Director
+1-212-908-0727
or
Committee Chairperson
Joseph Staffa
Senior Director
+1-212-908-0829
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
[email protected]

Source: Fitch Ratings

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