7 Del. Admin. Code § 1352-D-11.0

Current through Register Vol. 28, No. 7, January 1, 2025

Section 1352-D-11.0 - Local Government Bond Rating Test

11.1 Requirements for Use of Local Government Bond Rating Test to Comply with Financial Responsibility

11.1.1 A general purpose local government Owner or Operator and/or local government serving as a Guarantor may satisfy the requirements of PART D, Section 3.0 by having a currently outstanding issue or issues of general obligation bonds of at least the minimum Annual Aggregate amount required in PART D, Section 3.0 excluding refunded obligations, with a Moody's rating of Aaa, Aa, A, or Baa, or a Standard & Poor's rating of AAA, AA, A, or BBB. Where a local government has multiple outstanding issues, or where a local government's bonds are rated by both Moody's and Standard & Poor's, the lowest rating shall be used to determine eligibility. Bonds that are backed by credit enhancement other than municipal bond insurance shall not be considered in determining the amount of applicable bonds outstanding.

11.1.2 A local government Owner or Operator or local government serving as a Guarantor that is not a general purpose local government and does not have the legal authority to issue general obligation bonds may satisfy the requirements of PART D, Section 3.0:

11.1.2.1 having a currently outstanding issue or issues of revenue bonds of at least the minimum Annual Aggregate amount required in PART D, Section 3.0 excluding refunded issues and having a Moody's rating of Aaa, Aa, A, or Baa, or a Standard & Poor's rating of AAA, AA, A, or BBB as the lowest rating for any rated revenue bond issued by the local government. Where bonds are rated by both Moody's and Standard & Poor's, the lower rating for each bond must be used to determine eligibility. Bonds that are backed by credit enhancement may not be considered in determining the amount of applicable bonds outstanding.

11.1.3 The local government Owner or Operator or Guarantor shall maintain a copy of its bond rating published within the last 12 months by Moody's or Standard & Poor's.

11.1.4 To demonstrate that it meets the local government bond rating test, the Chief Financial Officer of a general purpose local government Owner or Operator and/or Guarantor shall have a letter signed by the Chief Financial Officer worded as specified in PART D, Section 27.0, Form J except that instructions in brackets are to be replaced by the relevant information and the brackets deleted.

11.1.5 To demonstrate that it meets the local government bond rating test, the Chief Financial Officer of local government Owner, Operator, or Guarantor other than a general purpose government shall have a letter signed by the Chief Financial Officer worded as specified in PART D, Section 28.0, Form K except that instructions in brackets are to be replaced with relevant information and the brackets deleted.

11.1.6 The Department may require reports of financial condition at any time from the local government Owner, Operator, or local government Guarantor. If the Department finds, on the basis of such reports or other information, that the local government Owner, Operator, or Guarantor, no longer meets the local government bond rating test requirements of this Section, the local government Owner or Operator shall obtain alternative coverage within 30 days after notification of such a finding.

11.1.7 If a local government Owner or Operator using the bond rating test to provide financial responsibility finds that it no longer meets the bond rating test requirements, the local government Owner or Operator shall obtain alternative coverage within 150 days of the change in status.

11.1.8 A local government Owner or Operator using the Local Government bond rating test under PART D, Section 11.0 shall maintain a copy of its bond rating published within the last twelve months by Moody's or Standard & Poor's.

7 Del. Admin. Code § 1352-D-11.0

20 DE Reg. 815 (4/1/2017)
27 DE Reg. 536 (1/1/2024) (Final)