PubFinCriteria_2006_part1_final1.qxp

Municipal Structured Finance

210 Standard & Poor’s Public Finance Criteria 2007

VII. Miscellaneous

I. Preference-proofed monies (issuer and/or obligors not bankruptcy-remote)

A. Available monies/eligible funds for payments not derived from credit and liquidity facilities.

B. Remarketing proceeds prohibited from issuer and obligor(s).

C. Preference opinion covering all payment events except defeasance not paid with available monies/eligible funds.

II. Payment events

A. Regularly scheduled principal & interest.

1. All interest rate modes described in detail


2. Adequate interest coverage provided by bank:
   a.) Maximum days in longest rate period covered, plus
   b.) Number of calendar days required to reinstate interest coverage after a draw on the bank facility, plus
   c.) Number of calendar days required to take out bondholders through mandatory tender, mandatory redemption,
   or acceleration following receipt of bank notice of interest nonreinstatement
   B. Mandatory tender


3. Mandatory tenders described in detail


4. Sources of payment
   C. Optional tender (puts)


5. Put options described in detail


6. Sources of payment
   D. Mandatory redemption


7. Mandatory redemption events described in detail


8. Sources of payment
   E. Optional redemption (calls)


9. Mandatory redemption events described in detail


10. Sources of payment


11. Premiums not covered by credit facility, if any:
    a.) On hand at time of call notice to bondholders
    b.) Investment options adequate to support rating
    F. Acceleration


12. Events of default and remedies described


13. Specify when interest ceases to accrue


14. Sources of payment
    G. Defeasance


15. New preference opinion required at time of legal defeasance if issuer and obligor(s) are not bankruptcy-remote


16. Standard & Poor’s rating maintenance required for variable-rate defeasance


17. Acceptable defeasance securities:
    a.) Cash
    b.) U.S. government obligations
    i.) U.S. Treasury obligations
    ii.) Agency obligations fully guaranteed by U.S.
    iii.) Obligations of certain agencies sponsored by U.S. government
    c.) Securities rated ‘AAA’ refunded with U.S. government obligations

III. Required bondholder takeouts

(mandatory tender, mandatory redemption, or acceleration)

A. Interest nonreinstatement following credit facility draw

B. Bank facility expiration

C. Replacement of bank facility without rating maintenance

D. Receipt of bank notice of event of default and termination of bank facility

Criteria Outline for Bank-Supported Municipal Debt