S&P Global Ratings said it raised its rating on various New Jersey Economic Development Authority's school facilities construction bonds six notches to AA-plus from BBB-plus.
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The outlook is stable.
"The upgrade reflect our view of the defeasance of the bonds through the deposit of cash and refunding bond proceeds in an escrow fund on Dec. 8, 2016," said S&P credit analyst David Hitchcock.
The bonds are due to be partially refunded at the redemption price of par plus accrued interest at various redemption and maturity dates as outlined in the escrow agreement.
The rating reflects:
- Sufficient collateral to pay principal and interest on all bonds at the respective redemption and maturity dates;
- Very high-quality investments that consist solely of cash and direct obligations of the U.S. government;
- Sufficient investment provisions to ensure the timely disbursement for all payment events; and
- A transaction structure that mitigates bankruptcy-related risk in a manner consistent with our criteria.
