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Fitch Rates $15.6MM California Poll Control Fin Auth VRDBs, (Best Way Disposal Project) 2012 'A/F1'

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings assigns a rating of 'A/F1', Stable Outlook, to the $15,600,000 California Pollution Control Financing Authority variable rate demand solid waste disposal revenue bonds (Best Way Disposal, Inc. Project), series 2012. The initial bond issuance is $5,200,000 with an option under the trust indenture to issue additional bonds up to $15,600,000. The release of additional bonds is contingent on the bank approving and increasing the stated amount of the letter of credit to support such additional bonds. The rating is based on the support provided by an irrevocable direct-pay letter of credit (LOC) issued by Bank of the West (rated 'A/F1', Stable Outlook).

The bank is 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) Oct. 9, 2013, the initial stated expiration date of the LOC, unless such date is automatically extended for one year periods; (b) conversion from the weekly interest rate mode; (c) any prior termination of the LOC; and (d) defeasance of the bonds. The LOC provides full and sufficient coverage of principal plus an amount equal to 45 days of interest at a maximum rate of 12% based on a year of 365 days and purchase price for tendered bonds, while in the weekly rate mode. The Remarketing Agent for the bonds is Westoff, Cone & Holmstedt. The bonds are expected to be delivered on or about Oct. 10, 2012.

The bonds initially bear interest at a weekly rate, but may be converted to a term rate. While bonds bear interest in the weekly rate mode, interest payments are due on the first Wednesday of each month, commencing on Nov. 7, 2012. The trustee is obligated to make timely draws on the LOC to pay principal, interest, and purchase price. Funds drawn under the LOC are held uninvested, and are free from any lien prior to that of the bondholders.

Holders may tender their bonds on any business day, provided the trustee, who also acts as the tender agent, and the remarketing agent are given the requisite prior notice of the purchase. The bonds are subject to mandatory tender: (1) upon conversion of the interest rate; (2) upon substitution or termination of the LOC; and (3) following receipt of written notice from the bank of an event of default under the reimbursement agreement, directing such mandatory tender. The bank has the option of directing acceleration rather than a mandatory tender upon an event of default under the reimbursement agreement. The bonds shall be accelerated following the trustee's receipt of notice of non-reinstatement of the interest portion of the LOC. Optional and mandatory redemption provisions also apply to the bonds including a mandatory redemption upon the expiration of the LOC.

The proceeds of the bond sale will be used to (i) finance and/or refinance the cost of acquiring, constructing, installing and equipping certain solid waste disposal facilities.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Criteria', Feb. 28, 2012;

--'Guidelines for Letter of Credit', July 20, 2012.

Applicable Criteria and Related Research:

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=672570

Rating Guidelines for Letter of Credit-Supported Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=681737

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Fitch Ratings
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Source: Fitch Ratings