Fitch to Confirm SD Value Added Fin Auth (Prairie Gold Dairy) Ser 2004 VRDBs at 'AA-/F1+'

On the effective date of Oct. 23, 2014, Fitch Ratings will confirm the 'AA-/F1+' rating assigned to the $3,000,000 South Dakota Value Added Finance Authority, variable rate demand solid waste disposal revenue bonds (Prairie Gold Dairy, LLC Project), series 2004. The Rating Outlook for the long-term rating is Stable. The rating action is in connection with: (i) the release and cancellation of the confirming letter of credit (CLOC) currently provided by CoBank, ACB (CoBank, rated 'AA-/F1+', Stable Outlook); (ii) the substitution of the underlying irrevocable direct-pay letter of credit (LOC) provided by Farm Credit West, PCA, which is not rated by Fitch, with a substitute LOC to be issued by CoBank; and (iii) the mandatory tender of the bonds, which will occur on Oct. 23, 2014.

KEY RATING DRIVERS:

On the effective date, the rating will be based on the support provided by the substitute LOC issued by CoBank, ACB.

Pursuant to the substitute LOC, the bank is obligated to make regularly scheduled payments of principal of and interest on the bonds in addition to payments due upon maturity, acceleration and redemption, as well as purchase price for tendered bonds. The rating will expire upon the earliest of: (a) July 1, 2016, the initial stated expiration date of the substitute LOC, unless such date is automatically extended for one-year periods; (b) any prior termination of the substitute LOC; or (c) defeasance of the bonds. The substitute LOC provides full and sufficient coverage of principal plus an amount equal to 109 days of interest at a maximum rate of 10% based on a year of 365 days and purchase price for tendered bonds, while in the weekly rate mode. The Remarketing Agent for the bonds is The Frazer Lanier Company, Inc.

RATING SENSITIVITIES:

The rating is exclusively tied to the short- and long-term rating that Fitch maintains on the bank providing the substitute LOC and will reflect all changes to that rating.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Criteria', February 24, 2014;

--'Rating Guidelines for Letter of Credit-Supported Bonds', June 4, 2014.

Applicable Criteria and Related Research:

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736618

Rating Guidelines for Letter of Credit-Supported Bonds and Commercial Paper

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=749431

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts:

Fitch Ratings
Primary Analyst
Linda Friedman, +1-212-908-0720
Senior Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Richard Park, +1-212-908-0289
Director
or
Committee Chairperson
Mario Civico, +1-212-908-0796
Senior Director
or
Media Relations
Elizabeth Fogerty, New York, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

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