Amended: Fitch Rates $453MM San Francisco Int'l Airport Rev Rfdg Bonds 'A'; Stable Outlook.

SAN FRANCISCO -- (This is an amended version of a press release issued on Oct. 27, 2006 and contains an updated amount for the special facilities lease revenue bonds in the third paragraph.)

Fitch assigns an 'A' rating to $453,210,000 City and County of San Francisco, California, San Francisco International Airport, second series revenue refunding bonds, consisting of:

--$270,000,000 Issue 32F bonds (non-alternative minimum tax; AMT);

--$153,210,000 Issue 32G bonds (non-AMT);

--$29,790,000 Issue 32H bonds (AMT).

Fitch affirms the 'A' rating on the $4.0 billion outstanding in airport revenue bonds. Fitch also affirms the 'BBB+' rating on approximately $112 million outstanding Special Facilities Lease Revenue Bonds (SFO Fuel LLC). Issue 32F-G bonds are scheduled to sell via a negotiated sale led by UBS Investment Bank on Nov. 1, 2006. The Rating Outlook on all bonds is Stable.

The 'A' rating reflects SFO's importance as a regional transportation provider for long-range domestic and international air service, as well as the San Francisco Bay Area's significant population base (in excess of 7 million), high wealth levels (2005 estimated median household income of $72,155), and diverse economy, which all support the strong passenger demand for service. Offsetting credit factors include the airport's high cost structure, with fiscal 2005 cost per enplanement (CPE) at $15.42 and debt per enplanement at $245 and the concentration of United Air Lines (UAL Corp; long term Issuer Default Rating 'B-', Stable Outlook by Fitch) that represents 48% of total enplanements as it uses SFO as one of its hub airports. This concentration is somewhat mitigated by the high level of origination & destination (O&D) enplanements, which represents 73% of total volume. The high percentage is indicative of the demand created by the airport's large, mature marketplace that other carriers would likely act to capture should United significantly alter its operations at SFO.

After three consecutive fiscal years of passenger declines from 2001-2003, enplanements rebounded in fiscal years 2004-2006, reaching a high of 16.5 million, up 13% over 2003 levels. Fitch views the airport's recent enplanement gains as proof of the resiliency of the marketplace and believes that growth will continue at a more moderate pace. The No. 2 air carrier at SFO is American Airlines (American Airlines, Inc.; long term IDR 'B-', Stable Outlook by Fitch) representing 9.9% of total enplanements. The airport has a great diversity of carriers providing service, 16 domestic passenger carriers, 22 foreign flag passenger carriers, and four commuter carriers.

With the execution of the airport's modest $819 million capital plan, SFO's CPE is expected to rise to approximately $17.30 in fiscal 2011. Management intends to maintain a competitive fare environment by encouraging the growth of low-cost carriers serving the airport, and strives to increase enplanements for long-haul and international service. Another offsetting credit factor is that the airport operates in a moderately competitive environment, as the Norman Y. Mineta San Jose International Airport (SJC) and Oakland International Airport (OAK) provide viable low-cost air service alternatives in the south and east bay.

Issue 32F-G bonds are secured by a pledge of net revenues from the airport and are on parity with the outstanding airport revenue bonds. Bond proceeds will be used to refund various series of outstanding bonds including portions of series 15B, 16B, 17, 18B, 19, 21, 23B, 24B, 26B, and 28B. Fitch expects the bonds to be insured by a financial insurer whose financial strength is rated 'AAA' by Fitch.

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.