existing rating on the obligor’s long-term debt unless
Standard & Poor’s receives legal comfort on the
bankruptcy concerns outlined above.
If these opinions cannot be provided, the highest
rating that can be achieved is the long-term rating
on the depositor.
Standard & Poor’s will not rate economically
defeased debt for corporations, partnerships, or
other similar issuers higher than such entities’
long-term rating. Although the entity has set
aside sufficient funds to satisfy the obligation,
the debt has not been legally discharged and,
therefore, in the event of an insolvency of such
entity, the escrow funds may be considered part
of the bankruptcy estate, and payments to the
bondholders may be interrupted. If a special pur-
pose entity (SPE) that meets Standard & Poor’s
SPE criteria is used and the appropriate bank-
ruptcy opinions are delivered, a higher rating
may be achievable.■Defeasancehttp://www.standardandpoors.com 59