Fitch to Rate CA's Foothill/Eastern Transportation Corridor Revs, Ser 1999 'AAApre'; Negative Watch

NEW YORK--()--On the effective date of Jan. 2, 2014, Fitch Ratings will assign a rating of 'AAApre', Rating Watch Negative to the $2,254,055,516 (principal or accreted amount at maturity or redemption date) Foothill/ Eastern Transportation Corridor Agency Toll Road Refunding Revenue Bonds, Series 1999 Current Interest Bonds, Convertible Capital Appreciation Bonds, and Capital Appreciation Bonds maturing Jan. 15, 2014 - Jan. 15, 2040.

KEY RATING DRIVERS

The 'AAApre' ratings and Negative Watch is based on the pledge of securities in the escrow deposit fund securing the bonds and reflects the lien of the refunded bondholders on the escrow trust funds and that all amounts will be invested in direct non-callable obligations of the United States or held uninvested in cash. The U.S. full faith and credit is currently rated 'AAA' with a Negative Watch by Fitch.

The bonds will be refunded on Jan. 2, 2014 with portions of the proceeds of the $2,274,616,568 Foothill/Eastern Transportation Corridor Agency Toll Road Refunding Revenue Bonds, Series 2013A and Series 2013B and Junior Lien Toll Road Refunding Revenue Bonds, Series 2013C, as well as amounts released from various accounts associated with the refunded Series 1999 bonds. The escrow trust fund securities will primarily be invested in direct non-callable obligations of the United States, with a portion held uninvested in cash for payment of the principal and interest due on Jan. 15, 2014. The rating applies to the bonds listed by CUSIP numbers, below.

Pursuant to an irrevocable escrow agreement, the escrow bank, The Bank of New York Mellon Trust Company, N.A., holds a separate special irrevocable escrow account in trust for the benefit of the refunded bondholders. All cash and securities held in the account are pledged irrevocably to the payment when due of interest on the refunded bonds and the payment of principal upon maturity and redemption. In the future, any investments of excess funds in the escrow account are limited to direct non-callable obligations of the United States; otherwise, excess funds will be held uninvested in cash. The bonds that mature on January 15, 2014 will be paid on that maturity date. The bonds with maturity dates of Jan. 15, 2020; Jan. 15, 2023; Jan. 15, 2026 - Jan. 15, 2029 will be redeemed at a redemption price of 101% on Feb. 1, 2014. The remainder of the bonds will be redeemed at par on Feb. 1, 2014.

BondResource Partners, LP verified the mathematical accuracy of computations relating to the adequacy of income from escrowed funds to pay debt service requirements of the refunded bonds. These computations were based on data provided to them by Barclays and Goldman, Sachs & Co., underwriters for the refunding bonds. According to the BondResource Partners verification report, the securities and cash deposited will produce amounts necessary for timely payment of the principal and interest on the refunded bonds. Prior to accepting additional investment securities, the escrow agent must receive a new report verifying the continued sufficiency of escrowed funds to meet all future payments of principal and interest on the refunded bonds.

RATING SENSITIVITIES

The rating is currently exclusively tied to the U.S. sovereign creditworthiness and will reflect all changes to that rating.

The rating of 'AAApre' on Rating Watch Negative applies to the bonds with the following CUSIP numbers:

345105DY3

345105ES5

345105DP2

345105DZ0

345105DT4

345105EL0

345105EM8

345105DQ0

345105EN6

345105FD7

345105DU1

345105DS6

345105FM7

345105FK1

345105FL9

345105DR8

345105FN5

345105DV9

345105FP0

345105FQ8

345105ET3

345105EU0

345105EV8

345105EW8

345105EX4

345105EY2

345105EZ9

345105FA3

345105FB1

345105EA4

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Criteria' (Feb. 27, 2013);

--'Guidelines for Rating Prerefunded U.S. Municipal Bonds', (Dec. 2, 2013).

Applicable Criteria and Related Research:

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701570

Guidelines for Rating Prerefunded Municipal Bonds -- Effective Jan. 11, 2011 to Nov. 14, 2011

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=596447

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. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings, Inc.
Primary Analyst
Kasia Reed, +1-212-908-0500
Analytical Consultant
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Linda Friedman, +1-212-908-0727
Senior Director
or
Committee Chairperson
Trudy Zibit, +1-212-908-0689
Managing Director
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

Sharing

Contacts

Fitch Ratings, Inc.
Primary Analyst
Kasia Reed, +1-212-908-0500
Analytical Consultant
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Linda Friedman, +1-212-908-0727
Senior Director
or
Committee Chairperson
Trudy Zibit, +1-212-908-0689
Managing Director
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com