Fitch Revises Tohopekaliga Water Authority Utility Sys Revs Series 2007 to 'A+/F1+'

Business Wire, May 12, 2008

NEW YORK -- Fitch Ratings downgrades the long-term rating currently assigned to the $92,395,000 Tohopekaliga Water Authority (Florida) Utility System variable rate revenue bonds, series 2007 to 'A ' and assigns a short-term rating of 'F1 ' to the bonds. The revision is in connection with the provision of an irrevocable, direct-pay letter of credit (LOC) issued by Landesbank Hessen-Thuringen Girozentale, acting through its New York Branch (Helaba), securing the bonds. Fitch currently rates The Tohopekaliga Water Authority (TOHO) 'AA-'. For more information on TOHO, please see the press release of April 13, 2007, available at www.fitchratings.com.

The bonds were initially issued in an auction rate mode with the support of an insurance policy provided by CIFG Assurance North America. On April 10, 2008 the bonds were called for mandatory tender in connection with the rate mode conversion from auction rate to variable rate. Pending remarketing, the bonds are being held for the account of TOHO. The remarketing of the bonds is scheduled for May 22, 2008, at that time the insurance policy will be cancelled and the bonds will be supported solely by the LOC. Helaba, as LOC provider, is obligated to make payments of principal and interest on the bonds when due, as well as purchase price for tendered bonds. The LOC provides full coverage of principal plus an amount equal to 51 days of interest computed at a maximum rate of 12%, based on a year of 365 days, and purchase price for tendered bonds. The rating will expire on the earliest of: (i) May 22, 2011, the stated expiration date of the LOC, unless such date is extended; (ii) any prior termination of the LOC; or (iii) the defeasance of the bonds. The remarketing agent for the bonds is First Southwest Company.

Upon remarketing the bonds will bear interest in a weekly rate mode, but may be converted to a daily, flexible, auction, term or fixed interest rate mode. While bonds bear interest in the weekly rate mode, interest payments are payable on the first business day of each month, commencing June 2, 2008, and bondholders have the option to tender their bonds on any business day, with the requisite prior notice. The bonds are subject to mandatory tender upon: (1) conversion of the interest rate mode; (2) the first business day following the last day of each flexible rate period; (3) the expiration, termination or substitution of the LOC ;(4) an Event of Default under the LOC Reimbursement Agreement; (5) notice of mandatory tender from the Issuer while the bonds bear interest in the daily or weekly rate mode; and (6) a notice from the LOC provider that interest will not be reinstated. 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.