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You are hereHome › Newsroom › State Bond Guarantee Programs Receive Ratings Upgrade from Standard and Poor’s
State Bond Guarantee Programs Receive Ratings Upgrade from Standard and Poor’s
Thursday, October 1, 2015 · 4:38 pm
Standard & Poor's Ratings Services has raised its rating on all bonds guaranteed by either the Arkansas Development Finance Authority (ADFA) or Arkansas Economic Development Commission (AEDC) Guaranty Programs to 'A+' from 'A'.
At the same time, Standard & Poor's assigned its 'A+' rating, and stable outlook, to ADFA's taxable $13.7 million Economic Development revenue bonds, series 2015. These Bonds are set to be marketed on Tuesday, October 6 by a group led by Stephens Inc., which includes Crews and Associates and Raymond James, Inc. The bonds are secured by revenues derived from loan agreements between either ADFA and the borrower, or the AEDC and the borrower.
The projects to be financed with the proceeds of the bonds are as follows:
Southwest Steel Processing LLC –Located in Newport, Southwest Steel Processing LLC will purchase equipment to expand forging component parts operations at the company’s manufacturing facilities. The company previously announced it intends to create 100 jobs as part of its expansion.
Global Food Group, Inc. –Located in Clinton, Global Food Group, Inc. is renovating a manufacturing facility to expand its food processing capabilities. The company previously announced it intends to create 224 jobs as part of its expansion.
The 'A+' rating indicates strong financial performance comparable with other state finance agencies in that rating category; an asset base that continues to be high quality and low risk, an experienced management team; and ADFA's ongoing ability to meet its legislative mandate.
The ADFA/AEDC Bond Guarantee programs provide credit enhancement to new and/or expanding companies in Arkansas. The program allows these companies to secure long term fixed rate, fixed asset financing that they many otherwise be difficult to secure. Since the ADFA and AEDC program’s inception, they have participated in 179 industrial projects located in the state for 143 separate borrowers.
Standard & Poor's credit ratings have achieved wide investor acceptance as easily usable tools for differentiating credit quality. Under present commercial bank regulations issued by the Comptroller of the Currency, bonds rated in the top four categories (‘AAA’, ‘AA’, ‘A’, ‘BBB’, commonly known as investment-grade ratings) generally are regarded as eligible for bank investment.
For more information about ADFA and its programs, go to www.arkansas.gov/adfa.