...GOs Protected in Bankruptcy: Fitch's assignment of an `AAA' rating to San Diego Unified School District's (SDUSD) pending issuance of general obligation (GO) bonds follows the receipt of supporting legal opinions identifying revenues pledged to bondholders as special revenues under the U.S. Bankruptcy Code. Debt service payments from special revenues are expected to be uninterrupted in the event of bankruptcy. The delivery of legal opinions confirming the revenues as "pledged special revenues" is a market innovation and consistent with our criteria and commentary supporting the rating conclusion. Constitutional Provisions Key: The new legal opinions apply specifically to SDUSD bonds issued under the provisions of Proposition 39, which amended the state constitution to allow for issuance of local school bonds with the support of a 55% majority of voters. The proposition also included requirements that bond proceeds be reserved for specific capital improvements authorized by local voters....
