Fitch Affirms Texas Permanent University Fund Debt at 'AAA' & 'AAA/F1+'.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms the 'AAA/F1+' rating of the Board of Regents An independent governing body that oversees a state's public Colleges and Universities. All 50 states have governing bodies that oversee the administration of public education. of The University of Texas System (UT) permanent university fund (PUF PUF Public Use File PUF Parallel URL fetcher (*nix download tool) PUF Physically Unclonable Function PUF Northern Puffer PUF Paid-Up-Front PUF Preguntas de Uso Frequente (Spanish: Frequently Asked Questions) ) flexible-rate notes (FRNs), series A program. UT plans to sell a new $100 million tranche of the FRNs on March 1. The program has a maximum capacity of $400 million and no FRNs are currently outstanding. The UT FRNs will be sold through a competitive process. Goldman, Sachs and Co. is the remarketing agent. Bond proceeds will be used to fund various capital improvements. Fitch affirms its 'AAA' on $1 billion of outstanding UT senior lien senior lien n. the first security interest (lien or claim) placed upon property at a time before other liens, which are called "junior" liens. (See: mortgage, deed of trust, lien, UCC-1) PUF bonds and $425.7 million of the Board of Regents of The Texas A&M University System (the A&M System) outstanding senior lien PUF bonds. Fitch also affirms its 'AAA/F1+' on the A&M System PUF FRN FRN See: Floating-rate note program, which has a maximum capacity of $125 million. All outstanding PUF bonds are listed below. The 'AAA' rating is supported by the PUF's vast investment holdings, which had a market value of $10.9 billion on Jan. 31, 2007. The Texas constitution requires that funds be distributed annually from the PUF to pay bond and note debt service on debt issued by UT and the A&M System. UT receives two-thirds of the PUF's annual distributions and the A&M System receives one-third. The annual distributions are made under policies of the UT Board of Regents pursuant to the current endowment distribution policy of 4.75%. For fiscal 2007 the PUF total distribution will be $400.7 million, and interest of the system is expected to be approximately $268 million. UT's distribution is expected to cover PUF bond and note debt service by 2.9x times (x) for fiscal 2007. Under the constitution, UT PUF debt may not exceed 20% of the cost value of the PUF at the time of issuance. The cost value totaled $9.8 billion on Jan. 31, 2007. The A&M System's debt limit is 10% of the cost value of the PUF. Total UT PUF debt to be outstanding, after the $100 million FRN issuance, will be $1.1 billion. Total PUF debt outstanding for the A&M System is $425.7 million. The 'F1+' rating is based on UT's financial resources available to cover maximum liquidity demands. The UT Board has executed a security purchase agreement with the University of Texas Investment Management Company (UTIMCO UTIMCO University of Texas Investment Management Company ), a 501(c)(3) corporation created in 1996 for the specific purpose of managing UT System investment funds. The security purchase agreement provides liquidity support for the PUF FRNs in addition to other short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. programs. A separate security purchase agreement provides support for the A&M System FRNs. As of Jan. 31, 2007, the UT System's highly liquid short-term fund (STF STF Supremo Tribunal Federal STF Summary Tape File (US Census) STF Special Task Force STF Svenska Turistföreningen STF Saskatchewan Teachers Federation STF Save the Tiger Fund STF Sony Talk Forum ) and intermediate-term fund (ITF ITF International Transport Workers' Federation ITF International Tennis Federation ITF In the Future ITF International Trust Fund (demining NGO based in Slovenia) ITF International Transport Forum ) had a combined market value of $4.2 billion, net of bond proceeds, providing 9.9x times coverage of outstanding short-term debt. The coverage for the period Feb. 1, 2006 through Dec. 31, 2006 averaged 6.1x and includes bond proceeds. Assuming all short-term debt programs were outstanding at the maximum amounts, $400 million of PUF FRNs and $800 million of commercial paper, the available funds would cover the debt by 3.5x times. The ITF asset allocation is as follows: 25% traditional fixed-income securities, 15% domestic equities, 12.5% absolute return hedge funds, 12.5% directional hedge fund, 10% U.S. Treasury inflation-protected securities (TIPS), 10% global ex-U.S. equities, 10% real estate investment trusts, and 5% commodities. While the ITF is less liquid and has a higher risk level than the STF, the additional investments of $3.3 billion offset these concerns. Fitch affirms the following Board of Regents of the University of Texas System permanent university fund bonds at 'AAA': --Series 1997 --Series 2002A --Series 2004A --Series 2004B --Series 2005A --Series 2005B --Series 2006A --Series 2006B --Series 2006C Fitch affirms the following Board of Regents of The Texas A&M University System Permanent University Fund Bonds at 'AAA': --Series 1992A --Series 1998 --Series 2003 --Series 2004 --Series 2006 Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. 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 Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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