2003-7 involved a VPF with standard commercial terms similar to the VPF described above, with one notable exception: the counterparty in the ruling did not have the right to borrow the underlying shares
pledged by the counterparty.
Pledged revenues, consisting of system payments, series payments, and transfers and interest earnings from the revenue stabilization fund, provide about 1.
A dire Fitch stress test assuming a 10% decline in
pledged revenues every year beginning in 2006 results in use of the district's allocated fund balance, but does yield full and timely bondholder repayment.
Specific
pledged motor fuel taxes to repay the bonds include the state's 17.
Approximately 75% of all
pledged loans, predominately those of the 10 largest borrowers, are estimated to be investment grade quality by Fitch.
The bonds are special revenue obligations of the commission, payable from revenue from various highway user fees and taxes (about 60% motor fuel taxes) constitutionally dedicated for highway purposes and deposited in the original fund and the portion of the motor vehicle sales tax formerly deposited in the state general revenue fund to be deposited in the state road bond fund (the new fund) and
pledged to bondholders pursuant to Amendment 3.
However, a one-quarter cent sales tax is
pledged to the bonds.
Per the gaming revenue code (GRC) adopted by the tribal council in 1995, 80% of the net gaming tax is restricted in use to economic development expenses and this revenue is
pledged to bond holders.
Fitch cites as a concern that the performance of
pledged project-related revenues is dependent on the success of the team and stadium.
The ratings reflect the healthy coverage for bond debt service provided by
pledged documentary stamp taxes and various covenants limiting the ability to issue additional debt.
Growth in enrollment and credit hours is strong, leading to overall growth in
pledged revenues.
The 'BBB' rating incorporates credit strengths including strong bondholder protections; relatively broad
pledged revenues generated by federally chartered Pueblo corporations, providing insulation from Pueblo politics; and no per capita distributions.
