Fitch Confirms Bay Area Toll Authority 2001-2007 VRBs at 'AA-/F1+'; 2007A-2 to 'AA-/F1'

Business Wire, August 27, 2008

NEW YORK -- Fitch Ratings has confirmed the 'AA-/F1 ' ratings on the following Bay Area Toll Authority, San Francisco Bay Area Toll Bridge Revenue Bonds, variable-rate bonds (2008 Reoffering), totaling $1,658,320,000 and consisting of the following:

--Series 2001A, B and C;

--Series 2003C;

--Series 2004A, B and C;

--Series 2006B-1 and C;

--Series 2007A-1, C-1, G-1, B-2, C-2, D-2, E-3, G-2 and G-3.

Fitch has also revised the rating on the $75,000,000 2007A-2 bonds to 'AA-/F1'.

The rating actions, effective Aug. 28, 2008, are in connection with the cancellation of bond insurance policies previously issued to secure payment of regularly scheduled principal and interest payments on the bonds; the replacement of various liquidity facilities which provided purchase price for tendered bonds; and the reoffering of the bonds as uninsured bonds expected to occur on Aug. 28, 2008. The long-term 'AA-' rating assigned to the bonds is based on the rating that Fitch has assigned to the toll bridge revenue bonds issued by Bay Area Toll Authority (BATA). For more information on BATA's long-term rating, see the July 25press release ('Fitch Rates Bay Area Toll Authority's (California) $717MM Revs 'AA-'; Outlook Stable') available at www.fitchratings.com.

The short-term ratings on the bonds are based on the liquidity support of one standby bond purchase agreement (SBPA) under which each bank is responsible solely for its pro rata share of the purchase price of the bonds of a designated series. The banks, their related series and the remarketing agents responsible for the reoffering of the bonds are as follows:

2001 Series A

--Bayerische Landesbank (BLB);

--California Public Employees Retirement System Inc. (CalPERS);

--J.P. Morgan Securities (JPMS).

2001 Series B

--Calyon;

--Citigroup Global Markets Inc. (Citi).

2001 Series C

--JPMorgan Chase Bank, N.A. (JPM);

--Merrill Lynch, Pierce, Fenner & Smith Inc. (ML).

2003 Series C

--JPM;

--Stone & Youngberg LLC.

2004 Series A

--Landesbank Baden-Wurttemberg (LBBW);

--JPMS.

2004 Series B

--BLB;

--CalPERS;

--Citi.

2004 Series C

--Bank of America, N.A. (BofA);

--BLB;

--CalPERS;

--Lehman Brothers Inc. (LBI).

2006 Series B-1

--LBBW;

--CalPERS;

--Citi.

2006 Series C

--Lloyds TSB Bank PLC;

--CalPERS;

--JPMS.

2007 Series A-1

--BLB;

--CalPERS;

--JPMS.

2007 Series C-1

--JPM;

--Morgan Stanley & Co. (MS).

2007 Series G-1

--JPM;

--LBI.

2007 Series A-2

--Union Bank of California, N.A.;

--JPMS.

2007 Series B-2

--JPM;

--Citi.

2007 Series C-2

--Calyon;

--Stone & Youngberg LLC.

2007 Series D-2

--LBBW;

--CalPERS;

--ML.

2007 Series E-3

--BofA;

--CalPERS;

--MS.

2007 Series G-2

--LBBW;

--BLB;

--CalPERS;

--LBI.

2007 Series G-3

--JPM;

--LBI.

JPM is acting as agent bank pursuant to the SBPA. The SBPA provides for the payment of the principal component of purchase price and an amount equal to 34 days of interest calculated at a maximum rate of 12% per annum, based on a year of 365 days, when the bonds bear interest in a daily or weekly rate mode. The SBPA will expire on (i) Aug. 27, 2009 with respect to 2001 series B and C, 2003 series C, and 2007 series C-1, G-1, A-2, B-2, C-2, and G-3; and (ii) Aug. 26, 2011 with respect to 2001 series A, 2004 series A, B and C, 2006 series B-1 and C, and 2007 series A-1, D-2, E-3 and G-2, unless such dates are extended or the SBPA is earlier terminated pursuant to its terms. The short-term ratings assigned to the bonds will expire upon the expiration or termination of the SBPA. Union Bank of California, N.A., as trustee, is required to give notice to the agent bank in the event that remarketing proceeds are insufficient to pay purchase price for tendered bonds.

The bonds will be reoffered in the weekly rate mode, but may be converted to bear interest in the daily, commercial paper, term, fixed, index, or auction rate modes. While the bonds bear interest in the daily and weekly rate modes, interest is payable on the first business day of each month. Holders of bonds bearing interest in a daily or weekly rate mode may tender their bonds for purchase with prior notice. The bonds are subject to mandatory tender: (i) on each interest rate mode conversion date; (ii) on the interest payment date immediately following the rate period for bonds in the commercial paper or term modes; (iii) upon the expiration or termination of the SBPA; (iv) upon substitution of the SBPA unless such substitution will not cause a reduction or withdrawal of the short-term rating assigned to a series of bonds; (v) upon termination of the SBPA at the request of BATA; and (vi) upon the occurrence of certain events of default under the SBPA. The bonds are also subject to mandatory sinking fund redemption and optional redemption.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.