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Fitch Rates State Pub Works Board Lease Rev Bds (Univ of CA) 'AAApre'; Watch NegativeNEW YORK --(Business Wire)-- Fitch Ratings has assigned a rating of 'AAApre', Rating Watch Negative to the following bonds: --$70,845,000 State Public Works Board of the State of California (SPWB) Lease Revenue Bonds (The Regents of the University of California) 2006 Series E (University of California Research Project), maturing Oct. 1, 2014 - Oct. 1, 2031; --$49,850,000 SPWB Lease Revenue Refunding Bonds (The Regents of the University of California) 2007 Series B (Various University of California Projects), maturing June 1, 2015 - June 1, 2019; --$234,925,000 SPWB Lease Revenue Bonds (The Regents of the University of California) 2008 Series A (UC Irvine Medical Center Replacement Hospital), maturing March 1, 2014 - March 1, 2033; --$22,720,000 SPWB Lease Revenue Bonds (The Regents of the University of California) 2008 Series B (UC San Francisco Moffitt and Long Hospital Seismic Upgrade), maturing March 1, 2014 - March 1, 2033; --$10,850,000 SPWB Lease Revenue Bonds (The Regents of the University of California) 2008 Series C (Natural Sciences Unit 2 - McGaugh Hall Expansion), maturing June 1, 2014 - June 1, 2023; --$149,640,000 SPWB Lease Revenue Bonds (The Regents of the University of California) 2009 Series E (Various University of California Projects), maturing April 1, 2014 - April 1, 2034; --$36,755,000 SPWB Lease Revenue Bonds (The Regents of the University of California) 2009 Series F (San Diego Campus Various Improvements), maturing April 1, 2014 - April 1, 2034. KEY RATING DRIVERS: The rating of 'AAApre', Rating Watch Negative is based on the pledge of securities in the escrow deposit funds securing each respective series of bonds and reflects the lien of the refunded bondholders on the escrow trust funds and that all amounts have been invested in: (1) direct non-callable obligations of the United States; and (2) non-callable senior obligations of Fannie Mae (FNMA) and Freddie Mac (FHLMC) (with the exception of the 2008 series C bonds, where amounts have been solely invested in direct non-callable obligations of the United States). The U.S. full faith and credit is currently rated 'AAA' on Rating Watch Negative by Fitch. As the ratings of FNMA and FHLMC are currently linked to the U.S. sovereign rating, any rating action on the U.S. sovereign rating will directly affect the rating on the bonds with escrow trust funds invested in those securities. Should Fitch's view of the strength of government support for FNMA/FHLMC be reduced or downgraded, the rating of FNMA/FHLMC may be delinked from the U.S. sovereign rating and may result in negative pressure on the rating of the bond series supported by those securities. The bonds were refunded on Oct. 2, 2013 with portions of the proceeds of the $2,458,550,000 The Regents of the University of California general revenue bonds 2013 series AI, series AJ (taxable), series AK and series AL (variable rate demand bonds), as well as amounts released from various accounts associated with the refunded bonds. The ratings apply to the bonds listed by CUSIP numbers, below. Pursuant to seven separate irrevocable escrow agreements, the State Treasurer, as escrow agent, holds separate special irrevocable escrow accounts, established by the State Controller within the State's Treasury, in trust for the benefit of the refunded bondholders for each respective series. All cash and securities held in the accounts are pledged irrevocably to the payment when due of interest on the refunded bonds and the payment of principal upon redemption. In the future, any substitute investments for the 2008 series C bonds are limited to direct non-callable obligations of the United States and any substitute investments for the remaining six series of bonds are limited to direct non-callable obligations of the United States and obligations of FNMA or FHLMC not callable prior to maturity. The 2006 series E bonds will be redeemed at par on Oct. 1, 2016, with the exception of the Oct. 1, 2014 - Oct. 1, 2016 maturities which will be paid at maturity; the 2007 series B bonds will be paid at maturity on June 1, 2015 - June 1, 2019; te 2008 series A bonds and 2008 series B bonds will be redeemed at par on March 1, 2018, with the exception of the March 1, 2014 - March 1, 2018 maturities which will be paid at maturity; the 2008 series C bonds will be redeemed at par on June 1, 2018, with the exception of the June 1, 2014 - June 1, 2018 maturities which will be paid at maturity; and the 2009 series E and 2009 series F bonds will be redeemed at par on April 1, 2019, with the exception of the April 1, 2014 - April 1, 2019 maturities which will be paid at maturity. Causey Demgen & Moore P.C. verified the mathematical accuracy of computations relating to the adequacy of income from escrowed funds to pay debt service requirements of each respective series of refunded bonds. These computations were contained in schedules provided to them by Barclays Capital, the underwriter for the refunding bonds. According to the Causey Demgen & Moore verification report, the securities and cash deposited will produce amounts necessary for timely payment of the principal and interest on each respective series of refunded bonds. Prior to accepting substitute or 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 each series of refunded bonds. RATING SENSITIVITIES: The rating is currently exclusively tied to the U.S. sovereign creditworthiness and will reflect all changes to that rating. Should Fitch's view of the strength of government support for FNMA/FHLMC be reduced or downgraded, the rating of FNMA/FHLMC may be delinked from the U.S. sovereign rating and may result in negative pressure on the rating of the bond series supported by those securities. The rating of 'AAApre' on Rating Watch Negative applies to the bonds with the following CUSIP numbers: 2006 Series E 1306843C5 1306843D3 1306843E1 1306843F8 1306843G6 1306843H4 1306843J0 1306843K7 1306843L5 1306843M3 1306843N1 1306843P6 1306843Q4 1306843R2 1306843S0 1306843T8 1306843U5 1306843V3 1306843W1 2007 Series B 130685CK4 130685CL2 130685CM0 130685CN8 130685CP3 2008 Series A 130685JU5 130685JV3 130685JW1 130685JX9 130685JY7 130685JZ4 130685KA7 130685KB5 130685KC3 130685KD1 130685KE9 130685KF6 130685KG4 130685KH2 130685KJ8 130685KK5 130685KL3 130685KM1 130685KN9 130685KP4 2008 Series B 130685KV1 130685KW9 130685KX7 130685KY5 130685KZ2 130685LA6 130685LB4 130685LC2 130685LD0 130685LE8 130685LF5 130685LG3 130685LH1 130685LJ7 130685LK4 130685LL2 2008 Series C 130685LS7 130685LT5 130685LU2 130685LV0 130685LW8 130685LX6 130685LY4 130685LZ1 130685MA5 130685MB3 2009 Series E 130685UH1 130685UJ7 130685UK4 130685UL2 130685UM0 130685UN8 130685UP3 130685UQ1 130685UR9 130685US7 130685UT5 130685UU2 130685UV0 130685UW8 130685UX6 130685UY4 130685UZ1 2009 Series F 130685VE7 130685VF4 130685VG2 130685VH0 130685VJ6 130685VK3 130685VL1 130685VM9 130685VN7 130685VP2 130685VQ0 130685VR8 130685VS6 130685VT4 130685VU1 130685VV9 130685VW7 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 U.S. Municipal Bonds http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724818 Additional Disclosure Solicitation Status http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=814850 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 (News - Alert) 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.
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