Fitch: Guidelines for VRDOs & CP Supported by Internal Liquidity.

NEW YORK -- In a newly released criteria report, Fitch Ratings has updated the guidelines for rating variable-rate demand obligations and commercial paper issued with internal liquidity.

Variable-rate demand obligations (VRDOs) and commercial paper (CP) accrue interest at short-term rates, generally allowing obligors to lower their interest costs. However, both VRDOs and CP entail frequent payment obligations, resulting in the need for access to liquidity if there is a failure to remarket or roll over the instrument. Such liquidity may be provided by a liquidity facility from a commercial bank or other financial institution, or through the internal funds of the obligor.

Fitch's short-term ratings address the likelihood of timely repayment of the tender price of VRDOs and the maturity value of CP. When liquidity is provided internally by the obligor, Fitch considers the issuer's overall financial strength, management expertise to administer potentially frequent payments to bond/noteholders, and liquid internal resources to comfortably fund maximum tender requirements for VRDOs or maturity payments for CP without disrupting normal operations or the provision of regular services.

The new report, 'Guidelines for Rating Variable-Rate Demand Obligations and Commercial Paper Issued with Internal Liquidity,' dated March 7, 2006, is available through Fitch Research on the Fitch Ratings web site at 'www.fitchratings.com'

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.