Fitch Rates El Paso, Texas Independent School District's 2004B VRBs 'AAA/F1+'

Business Wire, July 13, 2004

NEW YORK -- Fitch Ratings assigns a rating of 'AAA/F1+' to the $45,000,000 El Paso Independent School District (ISD), TX variable-rate unlimited tax school building bonds, series 2004B. The long-term 'AAA' rating is based on the guarantee provided by the Permanent School Fund of Texas (PSF) whose financial strength is rated 'AAA' by Fitch. The PSF guarantees all principal and interest payments due on the bonds. The 'F1+' short-term rating reflects the liquidity support in the form a standby bond purchase agreement (SBPA) issued by DEPFA Bank plc, acting through its New York Agency.

The SBPA provides for the payment of the purchase price of tendered bonds during the initial and variable rate modes in the event the proceeds of a remarketing of the bonds following a tender are insufficient to pay the purchase price. The SBPA is sized to provide for the entire principal amount of the bonds and 184 days of interest at the maximum interest rate of 8% and will expire on July 27, 2011, or upon the occurrence of other events of termination, according to its terms. The remarketing agent for the bonds is First Southwest Company. The bonds are expected to be delivered on or about July 27, 2004.

The bonds will bear interest at an Initial Rate from the closing date through Oct. 7, 2004, the last day of the Initial Rate Period. The first interest payment date will occur on Oct. 7, 2004. Thereafter, the bonds will bear interest at a weekly rate to be determined by the remarketing agent and interest will be paid on the first business day of each month. The bonds may remain in the weekly rate mode or may be converted to a monthly, quarterly, semiannual, term, flexible or fixed-rate mode.

Bondholders are required to tender their bonds for purchase at the end of the Initial Rate Period. Thereafter, holders may optionally tender their bonds with the required prior notice to the tender agent, the Bank of New York Trust Company, N.A., Dallas, Texas. Bonds are also subject to mandatory tender: (1) upon the conversion of the interest rate mode; (2) at the end of each flexible rate period; (3) upon the expiration, termination or substitution of the SBPA, unless such substitution will not cause a reduction or withdrawal of the rating on the bonds. Fitch's short-term rating on the bonds will expire upon any expiration or termination of the SBPA.

Bond proceeds will be used to finance improvements, renovations and equipping of school buildings in the District.