Moody's rates Medical College of Wisconsin bonds A1

Moody's Investors Service said it assigned an A1 rating to the $81 million series 2008A and $68.3 million series 2008B bonds to be issued by the Wisconsin Health and Educational Facilities Authority for the Medical College of Wisconsin.

The expected sale dates are July 16 for the fixed-rate series 2008A and July 29 for the variable-rate series 2008B.

The outlook is stable.

The series 2008B bonds are expected to be supported by a standby bond purchase agreement from M&I Marshall & Ilsley Bank (rated Aa3/P-1) and insurance from Assured Guaranty Corp. (financial strength rating of Aaa with a stable outlook).

Moody's also affirmed the A1 rating on other debt previously issued by the college through the Wisconsin Health and Educational Facilities Authority.

Proceeds of the series 2008A bonds will be used to refund the series 2004B-1 bonds, pay costs of building out the remaining portions of the Translational and Biomedical Research Center and renovating other facilities, fund a debt service reserve fund and pay capitalized interest and costs of issuance. Proceeds of the series 2008B bonds will be used to refund the series 2004B-2 bonds and pay costs of issuance.

In April 2008, the college converted $100 million of series 2004B-1, 2004 B-2 and 2004C bonds from auction-rate mode to the flexible-rate mode and purchased the bonds with funds raised under a collateralized repurchase agreement that matures on Oct. 10, 2008 and a line of credit. A portion of the proceeds from redemption of the series 2004B-1 bonds and the series 2004B-2 bonds will be used to immediately repay the bank line. The college will redeem the series 2004C bonds with its own funds at the same time the series 2008A and B bonds are issued.

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