On March 26, 2007, Moody's has rated the LCCCA bonds as AA1. As explained in this excerpt from Moody's press release, this rating is based ENTIRELY on Wachovia's five-year line of credit.

"The rating is based upon the irrevocable direct pay letter of credit provided by Wachovia Bank, N.A. (the Bank); the structure of the transaction, which ensures timely debt service and purchase price payment to investors; and Moody's evaluation of the creditworthiness of the bank issuing the letter of credit."

What happens to the bonds after five years? If the project fails to live up to its estimates - which it cannot, since the LCCCA's cash flow projections are based on the PricewaterhouseCooper reports which were withdrawn by their author - the rating of the bonds will collapse.

At the LCCCA board meeting on December 14, 2006, financial advisor Tom Beckett publicly stated that the LCCCA convention center construction bonds would be sold by the end of January, 2007.

At the LCCCA board meeting on January 31, 2007, financial advisor Tom Beckett publicly stated that the LCCCA convention center construction bonds would be sold by the end of the second or third week of February, 2007.

At the LCCCA board meeting on February 22, 2007, financial advisor Tom Beckett publicly stated that the LCCCA convention center construction bonds would be sold by the end of the second or third week of March, 2007.

In the Lancaster Intelligencer Journal of March 20, 2007, LCCCA executive director Dave Hixson was quoted as saying, "'We're probably a week-and-a-half from closing' on the bonds".

According to the Lancaster New Era, the bond sale closed on March 29, 2007.

Why the repeated delays?

Over several weeks in early 2007, Lancaster City Director Of Administrative Services Patrick Hopkins put together a $125 million bond sale, primarily for mandatory upgrades to the City's water system. Lancaster City received a favorable bond rating, and the bonds were quickly sold at an Internet auction among major lending institutions for a very advantageous fixed interest rate. Construction contracts for the water filtration plant project were not signed until AFTER the bond sale was completed.

Compare this to the announcement that the LCCCA convention center construction bonds would be in the form of risky "variable rate 7-day demand bonds" sold using a complex "Interest Rate Swap". In addition, Wachovia Bank - which has agreed to market the bonds - has provided a five-year letter of "credit commitment to provide credit enhancement and liquidity" in an attempt to enhance the LCCCA's bond rating.

Why can't the LCCCA sell their bonds using conventional financing, just like Lancaster City did?

Meanwhile, the LCCCA started pouring concrete for the foundations of the proposed convention center BEFORE the construction bonds were sold. This is like pouring the foundations of a house before the mortgage is approved.

At the LCCCA board meeting on February 22, 2007, marketing consultant Dan Logan publicly admitted that the current cash flow estimates for the proposed convention center were based on the 2000 PricewaterhouseCoopers report, the 2002 PricewaterhouseCoopers update, the 2003 C.H. Johnson update to the PricewaterhouseCoopers reports, and information provided by Interstate Hotels. Mr. Logan clearly stated that the 2006 PKF study (which called for major cost reductions to the project) was NOT taken into consideration.

This means that the projections being used to estimate the ability of the LCCCA to keep up with payments on their bonds are based on data that is questionable at best.

At the LCCCA Finance Committee Meeting of February 21, 2007, consultant Maurice Walker clearly stated in public that out of the proposed $64 million bond sale, just over $50 million would be available for construction. Mr. Walker's explanation was that much of the remainder of the borrowing was required to guarantee the bond sale, above and beyond the $20 million guaranteed by County Commissioners Paul Thibault and Ron Ford in late 2003, just before their terms in office expired.

Every bond sale is rated for credit risk by agencies such as Moody's or Standard and Poor's. Lancaster City's bond sales have consistently received excellent bond ratings. Yet the LCCCA has repeatedly pointed to the Wachovia five-year letter of "credit commitment toprovide credit enhancement and liquidity" as support for their bond rating.

The LCCCA convention center construction bond sale requires unconventional financing, "interest rate swaps", and credit enhancement. This proves that the LCCCA convention center construction bonds BY THEMSELVES are not worthy of an investment-grade credit rating.