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Fitch Rtes San Francisco Airport Comm. $140.62MM Var. Rate Revs Issue 36A & 36B

Business Wire, May 12, 2008

NEW YORK -- Fitch Ratings has assigned a rating of 'AAA/F1+' to the $100,000,000 Airport Commission (the Commission), City and County of San Francisco, California, San Francisco International Airport, second series variable rate revenue refunding bonds, issue 36A, and a rating of 'AA/F1' to the Commission's $40,620,000 second series, issue 36B.

The 'AAA' long-term rating assigned to the 36A bonds is based jointly on the letter of credit (LOC) provided by Wells Fargo Bank, National Association. (currently rated 'AA/F1+' by Fitch) and the 'A' rating assigned to the Commission. The 'AA' long-term rating assigned to the subseries 36B bonds is based jointly on the LOC provided by Union Bank of California, N.A. (currently rated 'A+/F1') and the Commission's 'A' rating. The short-term ratings for both issues are based solely on the LOCs.

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The long-term ratings assigned to the 36A and 36B bonds are based on Fitch's methodology that considers the likelihood of the failure of both a municipal issuer and a bank LOC provider. The methodology results in a rating that is up to two notches higher than the stronger of the two credits if the following conditions are met: (1) both entities have a rating of 'A' or higher; (2) 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 (3) the credit of the bank and the issuer have a low to medium degree of correlation. Note that because both entities must be rated 'A' or higher for this methodology to be applied, if the Commission or one of the banks listed above were downgraded to 'A-' or lower, the long-term rating assigned to the bonds would drop to that of the higher rated entity.

Pursuant to the LOCs, the banks are obligated to make payments of: principal of and interest on the bonds when due and purchase price for tendered bonds. The ratings will expire on the earliest of: the stated expiration date of the LOCs, unless such date is extended; any prior termination of the LOCs; and defeasance of the bonds. The 36A LOC stated expiration date is May 6, 2013; the 36B LOC expiration date is May 6, 2011. The LOCs provide full coverage of principal plus an amount equal to 50 days of interest at a maximum rate of 12%, based on a 365-day year while the bonds bear interest in a weekly rate mode. Banc of America Securities LLC is the underwriter and remarketing agent for the bonds. The bonds are expected to be delivered on or about May 12, 2008.

The bonds initially bear interest in the weekly rate mode but may be converted to a daily, commercial paper, term, auction or fixed interest rate mode. While the bonds bear interest in the daily and weekly rate modes, interest is payable on the first business day of each month, commencing June 2, 2008. Holders of bonds bearing interest at a daily or weekly rate mode may tender their bonds for purchase with prior notice. The bonds of each series are subject to mandatory tender: on interest mode conversion dates; at the end of each commercial paper period; upon the substitution, modification or reduction of the LOC relating to an issue of bonds if such action would result in a reduction or withdrawal of the rating assigned to such bonds; and upon the termination of the LOC upon non-reinstatement of the interest component of the LOC after a draw or the occurrence of an event of default under the LOC agreement. The bonds are also subject to optional and mandatory sinking fund redemption.

Bond proceeds will be used to refund outstanding 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.

Business Services Industry

Fitch Rtes San Francisco Airport Comm. $140.62MM Var. Rate Revs Issue 36A & 36B

Business Wire, May 12, 2008

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