Fitch Confirms University of Texas System's CP Rating at 'F1+'

Business Wire, Sept 2, 2008

NEW YORK -- Fitch confirms the 'F1 ' rating on Board of Regents of The University of Texas System's (the system) revenue financing System (RFS) commercial paper (CP) notes, series A (tax-exempt) and series B (taxable). The system recently approved an increase in maximum CP program authorization to $1.25 billion from $800 million to provide greater capacity to finance, on an interim basis, capital projects across its fifteen institutions.

The 'F1 ' rating is based on the system's financial resources available to cover maximum liquidity demands. As of July 31, 2008, UT identified approximately $3.1 billion of highly liquid funds, available daily, which would be used to support variable rate programs, including borrowings under RFS and permanent university fund (PUF). Assuming variable rate programs are drawn to their daily maximum limit, highly liquid funds would provide approximately 2.6 time coverage of debt requiring liquidity. Fitch recognizes that additional liquid assets are available to support variable rate debt. However, the conversion of these instruments to cash would not likely be immediate. Limits on the amount of CP and other variable rate instruments that may be tendered are in place to minimize potential daily calls on the system's liquidity.

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.