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r <br />►AUL <br />"11981 <br />July 2,1987 <br />800F. 68�c l <br />MGLEWIS&CO3ING. <br />INVESTMENT BANKERS <br />201 NORTH NEW YORK AVENUE, SUITE 300, WINTER PARK, FLORIDA 32789 TELEPHONE (305) 647-1621 <br />MAILING ADDRESS: POST OFFICE BOX 2743, WINTER PARK, FLORIDA 32790 <br />Mr. Joseph A. Baird <br />Director <br />Office of Management and Budget <br />Indian River County <br />1840 25th Street <br />Vero Beach, Florida 32960 <br />Dear Joe: <br />Pursuant to your request, the following are my thoughts as Financial Advisor to <br />Indian River County regarding the effect on the County's credit rating should an <br />industrial development bond, issued by the County for - the benefit of Nylacarb <br />Corporation, be defaulted on by Nylacarb Corporation. <br />It is my understanding that since the County acts o_ my as the issuing body or conduit <br />for the issuance of such bonds, the County bears no responsibility for the payment of <br />principal and interest on the bonds; this burden lies wholly with the corporation <br />and/or principals of the corporation and/or any credit enhancements that the <br />financing structure may include. Both the underlying bond documents and the <br />Official Statement will include explicit statements -to this effect; therefore, any <br />investor in such bonds should have knowledge of the County's position prior to - <br />purchase. Rating agencies are familiar with industrial development bonds and the <br />security that lies behind them; therefore I do not believe that the County's credit <br />rating will be affected - if a default in the payment of these bonds occurs unless the <br />cause of the default (Le, bancruptcy of the corporation) has a major impact on the <br />economy of the County. <br />I am in no position to judge what, if any, adverse publicity will accrue to the County <br />(the County will have its name on the bonds) if a default occurs, so I cannot express <br />any opinion as to the effect of such adverse publicity, if any. <br />Please let me know if you have further questions. <br />Sincerely, <br />Art ur H. Diamond <br />Vice President <br />Chairman Scurlock explained that after the Finance Advisory <br />Committee recommended denial because they were concerned about <br />the impact it might have on the County's credit rating, we <br />received positive comments from our financial consultant and bond <br />attorney and further information from Standard & Poor's. <br />a <br />-- <br />44 <br />s <br />