Alabama Department Of Corrections Facilities Project's Bonds Series 2021A And 2021B Assigned Preliminary 'A-' Rating

S&P Global Ratings assigned a preliminary 'A-' rating to the approximately $838 million Public Finance Authority Senior Secured Taxable Private Activity Revenue Bonds (Alabama Department of Corrections Facilities Project), Series 2021A and 2021B, issued by the Public Finance Authority (PFA). The rating outlook is stable. The final allocation between Series 2021A and 2021B may change. The 'A-' rating is based on the assumption that the final financing documents will be substantially similar to what S&P Global Ratings reviewed as of April 8, 2021. The rating reflects our view that the project's insolvency risk during construction is shifted from the project to Alabama Department of Corrections (ADOC) through the use of a unique prepayment mechanism. It also reflects our view that

...April 9, 2021 - S&P Global Ratings assigned a preliminary 'A-' rating to the approximately $838 million Public Finance Authority Senior Secured Taxable Private Activity Revenue Bonds (Alabama Department of Corrections Facilities Project), Series 2021A and 2021B, issued by the Public Finance Authority (PFA). The rating outlook is stable. The final allocation between Series 2021A and 2021B may change. - The 'A-' rating is based on the assumption that the final financing documents will be substantially similar to what S&P Global Ratings reviewed as of April 8, 2021. - The rating reflects our view that the project's insolvency risk during construction is shifted from the project to Alabama Department of Corrections (ADOC) through the use of a unique prepayment mechanism. It also reflects our view that the project's responsibilities to maintain the facilities are simple and consistent with other building-type social accommodation projects. Availability-based lease payments from ADOC provide...

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