...This report outlines Fitch Ratings' criteria for assigning short-term ratings to variable-rate demand obligations (VRDOs) and commercial paper (CP) issued with the support of external liquidity facilities. External liquidity facilities are dedicated third-party bank facilities available to the trustee and paying agent for the benefit of debt holders and exclusively for the repayment of specified short-term debt. Holders of VRDOs expect to receive purchase price equal to the principal of and accrued interest on their bonds upon the exercise of a tender option or any mandatory tender of the bonds. If tendered bonds cannot be remarketed, another source of funds must be readily available to pay tendering bondholders. CP is a short-term instrument that matures in 1-270 days and is assigned a short-term rating. Purchasers of CP issued with the benefit of external liquidity rely on that support as a source of payment as notes mature. The report outlines the framework of Fitch's analytical approach,...
