RES 87418 - Laserfiche WebLink

RATING Moody's Investors Service ("Moody's") has given the Certificates a rating of Any desired explanation of the significance of such rating should be obtained from the rating agency furnishing the same. The City furnished to such rating agency certain information and materials with respect to the Certificates and the City. Generally, rating agencies base their ratings on the information and materials so furnished to them and on investigations, studies and assumptions by the rating agencies. There is no assurance that such rating will be retained for any given period of time or that it will not be lowered or withdrawn entirely if, in the judgment of the agency originally establishing the rating, circumstances so warrant. Any such change in or withdrawal of such rating could have an adverse effect on the market price of the Certificates. On April 23, 1987, Moody's revised the City's rating from A1 to A for general obligation debt. In a release announcing the rating revision, Moody's cited the exposure of the City's surplus funds to contingent debt liability relating to the City's outstanding assessment bonds ("1915 Act Bonds") and the uncertainty of future revenue levels due to statutory revenue limitations. See "CITY OF PLEASANTON DIRECT AND OVERLAPPING BONDED DEBT STATEMENT," "CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS" and "RISK FACTORS" TAX EXEMPTION In the opinion of Orrick, Herrington & Sutcliffe, Special Counsel, based on existing statutes, regulations, rulings, and court decisions, the portion of each Rental Payment due under the Lease designated as and comprising interest and received by Owners of the Certificates is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes. A complete copy of the proposed form of opinion of Special Counsel is set forth in Appendix C hereto. The Internal Revenue Code of 1986, as amended, imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Certificates. The City has covenanted to comply with certain restrictions designed to assure that interest with respect to the Certificates will not be included in federal gross income. Failure to comply with these covenants may result in interest with respect to the Certificates being included in federal gross income, possibly 47