Fitch Upgrades South Carolina Transp Infrastructure Bank 2003B-3 L-T to 'AA-'; Rates S-T 'F1+'

Business Wire,  June 18, 2008  

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NEW YORK -- Fitch Ratings has upgraded the long-term rating on the South Carolina Transportation Infrastructure Bank's revenue refunding bonds (the Bonds), series 2003B-3 to 'AA-' from 'A'. Fitch has also assigned an 'F1+' short-term rating to the Bonds, which were originally issued in a principal amount of $122,750,000.

Currently, $121,125,000 of Bonds are outstanding. The rating actions are being taken in connection with the conversion of the interest rate on the Bonds from an auction-rate mode to a weekly rate mode on June 18, 2008; the addition of an irrevocable, direct-pay letter of credit (LOC); the termination of the municipal bond insurance policy provided by XL Capital Assurance Inc.; and the reoffering of the Bonds. The rating is based on the support provided by the direct-pay LOC issued by Wachovia Bank, National Association (Wachovia; rated 'AA-/F1+' by Fitch), securing the Bonds. Wachovia is obligated to make payments of principal and interest on the Bonds upon maturity, acceleration and redemption, as well as the purchase price for tendered Bonds.

The rating will expire upon the earliest of: June 17, 2011, 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 12%, based on a 365-day year and purchase price for tendered Bonds. The Remarketing Agent for the Bonds is Wachovia Bank, National Association.

Following today's conversion, the Bonds will bear interest in a weekly interest rate mode, but may be converted to an adjustable-, auction-rate, or fixed-rate mode. While the Bonds bear interest in a weekly interest rate mode, interest payments are the first business day of each month, commencing July 1, 2008. Bondholders may tender their Bonds on any business day, provided the remarketing agent and trustee are given prior notice of the purchase demand. The Bonds are subject to mandatory tender on (1) any conversion date; (2) the second business day preceding the stated expiration date of the LOC; (3) the effective date of an alternate LOC, if rating agency confirmation has not been received; (4) the fourth business day following the trustee's receipt of a written notice from Wachovia stating that there has been an event of default under the credit agreement and directing a mandatory purchase of the Bonds; and (5) any business day designated by Wachovia, with the consent of the remarketing agent, provided that Wachovia has given the trustee 40 days' prior written notice. Optional and mandatory redemption provisions also apply to the Bonds.

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.

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