Fitch Presale Revision: Missouri Highways & Transportation Commission Multi-Modal Road Bonds Series B of 2005 'AA+/F1+'

Business Wire, July 14, 2005

NEW YORK -- Fitch Ratings revises to 'AA /F1 ' the rating assigned on July 13, 2005 to the $72,000,000 Missouri Highways and Transportation Commission (the commission) multimodal third-lien road bonds, series B of 2005. The revised long-term 'AA ' rating is based jointly on the 'AA-' rating assigned to the commission's third-lien state road bonds and the support provided by an irrevocable letter of credit (LOC) issued by State Street Bank and Trust Company (the bank) (currently rated 'AA-/F1 ' by Fitch) securing the bonds. Previously the long-term rating had been based solely on the support of the LOC. The short-term rating of 'F1 ' is based only on the LOC.

The long-term 'AA ' rating is based on Fitch's methodology, which considers the joint probability of the failure of both a rated obligor and a bank LOC provider. The methodology results in a rating that is two notches higher than the stronger of the two credits if the following conditions are met: both entities have a rating of 'A' or higher; the transaction is structured such that payments from both the municipal issuer and the bank are in the flow of funds and both entities would have to fail to perform before the bonds defaulted; and the credit of the bank and the rated obligor have a low degree of correlation. Both entities must be rated 'A' or higher for this methodology to be applied. If either the commission or the bank were downgraded to 'A-' or lower, the long-term rating assigned to the bonds would drop to that of the higher rated entity.

The bonds will be issued as two subseries: $36,000,000 subseries 2005 B-1 and $36,000,000 subseries 2005 B-2. The bank is obligated to make payments of principal and interest upon maturity, acceleration, and redemption, as well as the purchase price for tendered bonds. The rating will expire upon the earliest of: July, 21, 2012, the stated expiration date of the LOC, unless such date is extended; any prior termination of the LOC; and defeasance of the bonds. The LOC provides full coverage of principal plus an amount equal to 35 days' interest at a maximum rate of 10%, based on a 365-day year and the purchase price for tendered bonds. RBC Dain Rauscher is the remarketing agent for the subseries 2005 B-1 and Merrill Lynch is remarketing agent for the subseries 2005 B-2. The bonds are expected to be delivered on or about July 21, 2005.

The bonds initially bear interest at the variable rate, which is set on a weekly basis by the remarketing agents, but may be converted to a daily, commercial paper, auction, term, or fixed interest rate. While bonds bear interest in the weekly rate mode, interest payments are the first business day of each month, commencing Aug. 1, 2005. During the weekly rate, bondholders may tender their bonds on any business day, with seven days' prior notice of the purchase. The bonds are subject to mandatory tender upon the expiration, termination, or substitution of the LOC and upon conversion of the interest rate mode. Mandatory and optional redemption provisions also apply to the bonds.

The bond proceeds will be used to finance the cost of certain projects in conformity with priorities established in the plans and analysis submitted by the commission.

Fitch's rating definitions are available on the agency's public web site, www.fitchratings.com. Published ratings, criteria and methodologies, and relevant policies and procedures are also available from this site, at all times. This document will remain on the public site for seven days.