Fitch Ratings has taken various conforming rating actions on enhanced municipal bonds and tender option bonds (TOBs) corresponding to actions taken on their associated enhancement providers or underlying bonds.
Long-term ratings on enhanced municipal bonds may be higher than those of their enhancement providers as discussed in Fitch’s ‘Dual-Party Pay Criteria for Long-Term Ratings on LOC-Supported US Public Finance Bonds’, dated March 8, 2013.
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Short-term ratings on enhanced municipal bonds may be lower than those of their liquidity providers, as discussed in Fitch’s ‘Rating Guidelines for Variable-Rate Demand Obligations Issued with External Liquidity Support’, dated Jan. 31, 2013.
Long-term ratings assigned to TOBs are the higher of the ratings assigned by Fitch to the applicable enhancement providers supporting the bonds and the ratings assigned by Fitch to the underlying bonds deposited in the issuing trust.
Short-term ratings on TOBs, if assigned, are based on ratings assigned by Fitch to their liquidity providers, with consideration given to the TOBs’ long-term ratings.
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