The rating on Portland, Ore.'s bonds is based on a direct pay LOC provided by Union Bank of Switzerland (UBS). UBS was placed on CreditWatch, with negative implications on Nov. 26, 1996. Each series of bonds will initially be issued in the flexible rate mode and may thereafter be converted to a daily, weekly, or term rate mode. The initial LOC covers principal of the bonds plus 60 days interest at 12% ($800,000 interest coverage per series). Each series of bonds must bear interest in the same mode. While bonds bear interest at the flexible rate, the trustee may not issue additional flexible rate bonds if aggregate interest accrued and unpaid, and yet to accrue on all outstanding flexible rate
