Rating Action Commentary
ֳ Rates San Jose Financing Authority CP Notes, Series 1 and 1-T 'F1+'
Mon 12 May, 2025 - 3:38 PM ET
ֳ - New York - 12 May 2025: ֳ assigns a rating of 'F1+' to San Jose Financing Authority, tax-exempt lease revenue commercial paper notes series 1 and taxable lease revenue commercial paper notes, series 1-T (notes).
KEY RATING DRIVERS
The rating is based on the support provided by an irrevocable direct-pay letter of credit (LOC) issued by TD Bank, N.A. (AA-/F1+/Negative) which has a stated expiration date of May 17, 2030, unless extended or earlier terminated. TD Bank LOC provides coverage for the principal amount of the notes and interest due on the maturity dates of the notes.
Computershare Trust Company, National Association, as the Issuing and Paying Agent (IPA) for the notes is directed to request an advance under the LOC to pay principal and interest on maturing notes. The LOC provides sufficient coverage for the principal amount of notes and 270 days of interest calculated at 10% based upon a 365-day year. The LOC provides sufficient coverage for note issuance up to $175,000,000 inclusive of interest coverage.
All notes will be issued at par, with interest due at maturity. Following the occurrence of an event of default under the LOC, TD Bank may direct the IPA to immediately stop the issuance of any additional notes. In such event, the LOC will expire after all the notes supported by such LOC mature and have been paid from funds drawn on the LOC. Alternatively, TD Bank may also direct the IPA to draw on the LOC for the principal amount of all notes outstanding and interest to accrue to their respective maturity dates. The IPA will hold such funds in uninvested and pay the notes as they mature. Barclays Capital Inc., TD Securities (USA) LLC, and Morgan Stanley & Co. LLC are the dealers for the notes. .
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
The rating of the CP notes is exclusively tied to the short-term rating that ֳ maintains on the bank providing the LOC and will reflect all changes to that rating.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
The rating of the CP Notes is in the highest rating category and cannot be upgraded.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
The rating assigned to the notes is based on the rating of the bank providing the LOC.
Additional information is available on
PARTICIPATION STATUS
The rated entity (and/or its agents) or, in the case of structured finance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer’s available public disclosure.
APPLICABLE CRITERIA
ADDITIONAL DISCLOSURES
ENDORSEMENT STATUS
| San Jose Financing Authority (CA) | EU Endorsed, UK Endorsed |