Harrisburg, Pa., misses payments on 2007C, D notes, might miss others

By Devika Patel

Knoxville, Tenn., Sept. 2 - The Harrisburg Authority (Dauphin County, Pa.) announced a creditor's failure to perform in regards to the City of Harrisburg's $20.96 million of series 2007C guaranteed resource recovery facility limited obligation notes and its $9.03 million of series 2007D guaranteed federally taxable resource recovery limited obligation notes.

The city failed to meet its payment obligations by making the required deposits for the bonds on Aug. 15.

The series C and series D service accounts hold, respectively, $0.49 and $0.84 on deposit. There is a $23.92 million deficiency in the series C account and a $10.77 million deficiency in the series D account.

As a result, Dauphin County, as guarantor of the notes, will transfer the necessary amounts to pay off the notes by Dec. 1.

TD Bank, NA is the trustee.

The city may also fail to make a payment on its series 1997D and 1997F general obligation refunding bonds.

Interim chief of staff and business administrator Robert F. Kroboth, in a letter to Bank of New York Mellon Trust Co., informed the company that "the city's current financial situation precludes" it "from making any transfer to fund for these debt service payments at this time. However, as you may be aware, the city is developing a comprehensive plan to meet its debt obligations in the near future. We will continue to strive toward that end."

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