Fitch Rates California Educational Facilities Authority 2008B Pomona College VRDRBs 'AAA/F1+'

Business Wire, June 17, 2008

NEW YORK -- Fitch Ratings has assigned an 'AAA/F1 ' rating to the California Educational Facilities Authority's $34,025,000 variable-rate demand revenue bonds (Pomona College) series 2008B. In addition, Fitch has affirmed the outstanding 'AAA' ratings on the $125.3 million outstanding Pomona College (Pomona) debt.

The bonds are expected to sell on or about June 26, 2008. The college will use the proceeds of the Bonds for the purpose of financing a portion of the cost of the acquisition, construction, rehabilitation, remodeling, renovation, and/or equipping of certain educational facilities.

The long-term 'AAA' rating reflects Pomona's reputation as one of the top private liberal arts colleges in the U.S., demonstrated by strong student demand and high selectivity; strong balance sheet liquidity; and proven fundraising capabilities. While credit risks are minimal, Pomona depends heavily upon investment income generated through annual spending of a portion of the total return generated by its pooled investment fund. However, this is not atypical for private colleges and universities with similar size investment portfolios. A material deterioration in Pomona's pooled investment fund, which contains its $1.8 billion endowment, is unlikely given the sophistication of its asset management strategy and management's diligence in monitoring overall portfolio performance.

The short-term 'F1 ' rating is based on the liquidity support provided by Bank of America, N.A., in the form of a standby bond purchase agreement (SBPA). The SBPA provides for the payment of the purchase price of tendered bonds during the weekly rate mode in the event that remarketing proceeds are insufficient to pay the purchase price. The SBPA is sized to provide for the entire principal amount of the bonds, plus 34 days of interest at the maximum interest rate of 12% based on a year of 365 days. The SBPA will expire on June 26, 2011, unless extended, or upon the occurrence of other events of termination, according to their terms. Fitch's short-term rating on the bonds will expire upon any expiration or termination of the SBPA.

The bonds initially bear interest in the weekly rate mode. The bonds can be converted to a term rate mode. While the bonds bear interest in the weekly rate mode, interest is payable on the first business day of each calendar month, commencing July 1, 2008. Holders of bonds bearing interest in the weekly rate mode may tender their bonds for purchase with prior notice. The bonds are subject to mandatory tender: (1) on the effective date of any new Interest Rate Period for the Bonds; and (2) any substitution, expiration, or termination of the SBPA. The bonds are also subject to optional and redemption provisions pursuant to the terms of the documents.

Founded in 1887, Pomona College is a private, independent co-ed liberal arts college, located on 140 acres in Claremont, CA.

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