FMSbonds Inc. Series 2020-XF0865 Receipt Ratings Lowered To 'AA/A-1', 'AA', And 'AA'

NEW YORK (S&P Global Ratings) April 2, 2020--S&P Global Ratings lowered its ratings on FMSbonds Inc.'s series 2020-XF0865 tender-option-bond trust puttable-floating-rate receipts (floaters); inverse-floating-rate receipts (residuals); and custodial receipts, related to Metropolitan Transportation Authority's series 2020A-1 transportation revenue green bonds, to 'AA/A-1', 'AA', and 'AA' from 'AA+/A-1'; 'AA+'; and 'AA+', respectively (please see the table). The rating action reflects S&P Global Ratings lowering of the rating on the underlying bonds. (For further information, please see the article, titled "Metropolitan Transportation Authority, NY Revenue Bond Rating Lowered To 'A-' On Pandemic's Effects," published March 24, 2020, on RatingsDirect.) The long-term rating on the custodial receipts reflects the higher of the rating on the AGMC bond-insured underlying security and the jointly correlated

...The short-term component of the rating on the floaters reflects the lower of S&P Global Ratings' rating on the liquidity provider, Bank of America N.A., and the correlated short-term rating of the long-term rating on the custodial receipts. The short-term rating reflects S&P Global Ratings' opinion of the likelihood of bondholders receiving interest-and-principal payments if they exercise their put option. Changes to the ratings on these bonds could result from, among other things, changes to the ratings on the underlying bonds or support provider, the correlation assumption, the expiration or termination of support agreements, or the amendments to transaction terms. As noted in the our analysis for Metropolitan Transportation Authority, "The rating action and negative outlook on the transportation revenue bonds reflect our view of financial challenges posed by the COVID-19 pandemic, including its impact on ridership and traffic, likely impact to subsidies and taxes, and prospects for permanent...

Ratings Action