Nov. 2, 2009 (Business Wire) -- Fitch Ratings assigns an 'AA-/F1+' rating to the City of Minneapolis and the Housing and Redevelopment Authority of the City of St. Paul, Minnesota (the Authority) health care system variable-rate demand revenue bonds (VRDBs) (Allina Health System), series 2009B, consisting of $57,260,000 series 2009B-1 and $57,260,000 2009B-2, and $50,000,000 series 2009C. The rating for series 2009B is based on an irrevocable direct-pay letter of credit (LOC) provided by JPMorgan Chase Bank, NA (rated 'AA-/F1+' by Fitch). The rating for series 2009C is based on an irrevocable direct-pay LOC provided by Wells Fargo Bank, NA (rated 'AA-/F1+').
The banks are obligated to make payments of principal of and interest on the bonds upon maturity, acceleration and redemption, as well as purchase price for tendered bonds. The ratings will expire upon the earliest of: (a) Nov. 9, 2012, the initial stated expiration date of the LOCs, unless such date is extended; (b) any prior termination of the LOCs; and (c) defeasance of the bonds. The LOCs provide full and sufficient coverage of principal plus an amount equal to 43 days of interest (Wells Fargo) and 34 days of interest (JPMorgan Chase) at a maximum rate of 12% based on a year of 365 days and purchase price for tendered bonds, while in the weekly and daily rate modes. The Remarketing Agent for the series 2009B-1 bonds is Goldman, Sachs and Co., and J.P. Morgan for the 2009B-2 bonds. The Remarketing Agent for the series 2009C bonds is Wachovia Bank, NA. The bonds are expected to be delivered on or about Nov. 10, 2009.
The series B bonds initially bear interest at a daily rate, the series C bonds initially bear interest at a weekly rate, but each series may be converted to a daily, weekly, long- term, bond interest term, or auction rate. While bonds bear interest in the daily or weekly rate mode, interest payments are on the first business day of each month, commencing Dec. 1, 2009. Holders may tender their bonds on any business day, provided the remarketing agent is given at least seven calendar days' prior notice of the purchase in the weekly rate mode, and notice by 10:45 a.m. New York time on the purchase date, in the daily rate mode. The bonds are subject to mandatory tender: (1) upon conversion of the interest rate; (2) upon expiration, substitution or termination of the LOC; and (3) on the second business day following receipt of written notice from the bank of an event of default under the Reimbursement Agreement, directing such mandatory tender. Optional and mandatory redemption provisions also apply to the bonds.
Bond proceeds will be used by the Authority to refund a portion of the issuer's $174,045,000 health care system variable-rate demand revenue bonds (Allina Health System), series 2007B-1; refund a portion of the issuer's $43,475,000 health care system variable-rate demand revenue bonds (Allina Health System), series 2007B-2; pay certain fees associated with the issuances of letters of credit; and pay certain expenses incurred in connection with the issuance of the bonds.
Additional information is available at 'www.fitchratings.com'.
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