Fitch cuts District of Columbia Medlantic/Helix bonds

Fitch Ratings said it downgraded the long-term rating assigned to the $150 million ($141.675 million outstanding) District of Columbia Multimodal revenue bonds, Medlantic/Helix issue, series 1998A, consisting of tranche I, tranche II and tranche III, each in the amount of $47.225 million, to AA-, AA and AA, respectively, from AAA.

In addition, Fitch assigned a short-term rating of F1+ to the bonds.

Fitch said the changes are in connection with the provision of three irrevocable, direct-pay letters of credit supporting the bonds, the conversion of the bonds from an auction rate to a variable rate, and the cancellation of the Financial Security Assurance, Inc. insurance policy that supports the bonds.

On May 20, the effective date of the conversion of the tranche I and II bonds from auction to variable rate, the tranche I bonds will be assigned a AA-/F1+ rating based on the support provided by a LoC issued by Wachovia Bank, NA and tranche II will be assigned a rating of AA/F1+ based on the support provided by a LoC issued by Bank of America, NA. On May 23, the conversion date for the tranche III bonds, the bonds will be assigned a rating of AA/F1+, also based on the support provided by a LoC issued by Bank of America.

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