Fitch to Confirm 'F1+' Rating on San Jose Fin Auth Lease Rev CP Notes, Tax-Exempt & Taxable Series

NEW YORK--(BUSINESS WIRE)--On the effective date of Feb. 28, 2013, Fitch Ratings will confirm the 'F1+' ratings on the City of San Jose Financing Authority (authority) tax-exempt and taxable lease revenue commercial paper revenue notes (notes). A maximum of $85,000,000 aggregate principal amount of authorized notes may be outstanding at any given time.

The rating actions are in connection with the Feb. 28, 2013: (i) supplement to the amended and restated trust agreement which provides for the reoffering of the authority's tax-exempt notes as series 1 and 2 notes and its taxable series as series 1-T and series 2-T; (ii) the provision of a substitute irrevocable direct- pay letter of credit (LOC) to be provided by State Street Bank and Trust Company (State Street, rated 'A+/F1+', stable outlook') as support for the tax-exempt series 1 notes and taxable series 1-T notes; and (iii) the provision of a substitute LOC to be issued by U.S. Bank National Association, (US Bank, rated 'AA-/F1+', stable outlook) as support for the tax-exempt series 2 notes and taxable series 2-T notes. On the effective date, the ratings on the tax-exempt series 1 notes and taxable series 1-T notes will based on the State Street LOC and the ratings on the tax-exempt series 2 notes and taxable series 2-T notes will based on the US Bank LOC. The ratings on the notes will expire on the earlier of Aug. 28, 2015, the expiration date of the respective substitute LOCs, unless such dates are extended, or upon any prior termination of the respective substitute LOCs.

The outstanding tax-exempt and taxable notes are currently supported by a single State Street LOC which will be terminated on Feb. 28, 2013.

Wells Fargo Bank, National Association will continue as Issuing and Paying Agent (IPA) for the notes and as IPA, is directed to draw under the respective substitute LOCs to pay maturing notes. The substitute LOCs provide sufficient coverage to pay for the principal amount of notes and up to 270 days of interest at the maximum rate of 10% based upon a 365 day year.

All notes will be issued at par, with interest due at maturity. Following the occurrence of an event of default under the respective reimbursement agreements, the applicable LOC banks may direct the IPA to immediately stop the issuance of any additional notes supported by such LOC bank. In such an event, the applicable substitute LOC will expire after all the notes supported by such LOC mature and have been paid from funds drawn on the respective substitute LOC. The dealer for the notes continues to be Barclays Capital.

Rating Sensitivities: The rating for each series of notes is exclusively tied to the short-term ratings that Fitch maintains on the banks providing the substitute LOCs and will reflect all changes to the respective bank's rating.

Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Rating Criteria', Feb. 28, 2012;

--'Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Support', Jan. 31, 2013.

Applicable Criteria and Related Research

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=672570

Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=699392

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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.