Fitch to Upgrade S-T Ratings on Eastern Municipal Water Dist., CA Rev VR COPs Series 2008C

NEW YORK--()--On the effective date of June 11, 2014, Fitch Ratings will upgrade the short-term rating assigned to the $54,400,000 ($47,450,000 currently outstanding) Eastern Municipal Water District (EMWD), CA water and sewer revenue refunding variable rate certificates of participation, series 2008C to 'F1+'. The short-term rating action is in connection with the substitution of the liquidity support currently provided by Mizuho Bank (rated 'A-/F1', Stable Outlook by Fitch) in the form of a Standby Certificate Purchase Agreement (SCPA) with a substitute SCPA to be issued by U.S. Bank, National Association (rated 'AA-/F1+', Stable Outlook).

KEY RATING DRIVERS:

On the effective date, the short-term 'F1+' rating will be based on the liquidity support provided by U.S. Bank, N.A., in the form of a substitute SCPA. The long-term 'AA+', Stable Outlook rating continues to be based on the long-term rating assigned by Fitch to the revenue bonds of Eastern Municipal Water District.

For more information on the long-term rating, see the press release dated May 28, 2014 entitled 'Fitch Affirms Eastern Municipal Water District, CA's Sr. Revs at 'AA+'; Outlook Stable' available on Fitch's website at www.fitchratings.com.

The substitute SCPA provides for the payment of the principal component of purchase price plus an amount equal to 34 days of interest calculated at a maximum rate of 12%, based on a year of 365 days for tendered bonds during the weekly rate mode in the event that the proceeds of a remarketing of the bonds are insufficient to pay the purchase price following an optional or mandatory tender. The substitute SCPA will expire on the earliest of: Dec. 11, 2017, the stated expiration date of the substitute SCPA unless such date is extended; conversion to a mode other than the weekly rate mode; the occurrence of certain other events of default which result in a mandatory tender; or other termination events related to the credit of EMWD which result in an automatic and immediate termination. The short-term 'F1+' rating will expire on the expiration or prior termination of the SCPA.

Citigoup Global Markets Inc. continues as the remarketing agent for the series 2008C COPs.

RATING SENSITIVITIES:

The short-term rating reflects the short-term rating that Fitch maintains on the bank providing liquidity support, and will be adjusted upward or downward in conjunction with the short-term rating of the bank and, in some cases, the long-term rating of the bonds.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Criteria', February 24, 2014;

--'Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support', January 27, 2014.

Applicable Criteria and Related Research:

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=730736

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736618

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Contacts

Fitch Ratings
Primary Analyst
Linda Friedman
Senior Director
+1-212-908-0727
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Mario Civico
Senior Director
+1-212-908-0796
or
Committee Chairperson
Trudy Zibit
Managing Director
+1-212-908-0689
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526 (New York)
elizabeth.fogerty@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Linda Friedman
Senior Director
+1-212-908-0727
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Mario Civico
Senior Director
+1-212-908-0796
or
Committee Chairperson
Trudy Zibit
Managing Director
+1-212-908-0689
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526 (New York)
elizabeth.fogerty@fitchratings.com