Fitch Rates $280MM Maryland HHEFA Rev Bonds UMMS Ser 2008.

NEW YORK -- Fitch Ratings assigns the following ratings to the $280,000,000 Maryland Health and Higher Educational Facilities Authority (HHEFA) revenue bonds, University of Maryland Medical System (UMMS) Issue, series 2008 (the bonds):

--$50,000,000 series 2008A bonds 'AA+/F1+';

--$75,000,000 series 2008B bonds 'AAA/F1+';

--$50,000,000 series 2008C bonds 'AA/F1';

--$50,000,000 series 2008D bonds 'AA/F1+';

--$55,000,000 series 2008E bonds 'AA/F1+'.

The long-term ratings assigned to the bonds are based jointly on the underlying rating assigned to the University of Maryland Medical System (currently rated 'A' by Fitch), and the support provided by the several individual irrevocable direct-pay letters of credit (LOCs) supporting a respective series of bonds. The series 2008A bonds are supported by Citizens Bank of Pennsylvania (currently rated 'AA-/F1+' by Fitch), the series 2008B bonds are supported by Bank of America, N.A. (currently rated 'AA/F1+' by Fitch), the series 2008C bonds are supported by PNC Bank, N.A. (currently rated 'A+/F1' by Fitch) and the series 2008D and E bonds are supported by SunTrust Bank (currently rated 'A+/F1+' by Fitch). The long-term ratings of Bank of America, N.A. and SunTrust Bank are on Rating Watch Negative as of March 7, 2008. The short-term 'F1+' rating assigned to the series 2008A, B, D and E bonds and the short-term 'F1' rating assigned to the series 2008C bonds are based solely on the respective LOCs. (For more information on the underlying credit please refer to the press release published on May 1, 2008).

The long-term rating is based on Fitch's methodology which considers the joint probability of the failure of both a rated obligor and a bank LOC provider. The methodology results in a rating that is up to two notches higher than the stronger of the two credits if the following conditions are met: (1) both entities have a rating of 'A' or higher; (2) the transaction is structured such that payments from both the municipal issuer and the bank are in the flow of funds and both entities would have to fail to perform before the bonds defaulted; and (3) the credit of the bank and the rated obligor have no more than a medium degree of correlation; in this instance there is a low degree of correlation. Fitch has determined a low degree of correlation between the UMMS and each of the respective banks which results in the rating of 'AA+' on the series 2008A bonds, 'AAA' on the series 2008B bonds and 'AA' on the series 2008C-E bonds. If either UMMS or any of the respective banks were downgraded to 'A-' or lower, the joint probability could no longer be applied and the long-term rating for the individual series of bonds would then reflect the higher of the two ratings.

Each bank is obligated to make payments of principal and interest when due, as well as purchase price for tendered bonds. The rating on each series of bonds will expire on the earliest of: the stated expiration date of the respective LOCs (currently May 21, 2011 for the series 2008A & C-E bonds and May 21, 2013 for the series 2008B bonds), unless otherwise extended, any prior termination of the LOCs, or defeasance of the respective series of bonds. The LOCs provide full coverage of principal plus an amount equal to 35 days of interest at a maximum rate of 10% based on a year of 365 days. The remarketing agents for the series 2008 bonds are as follows: series 2008A bonds: JP Morgan Securities Inc.; series 2008B bonds: Banc of America Securities, LLC; series 2008C bonds: PNC Capital Markets Inc.; series 2008D and E bonds: SunTrust Robinson Humphrey, Inc. The bonds are expected to be delivered on or about May 21, 2008.

The series 2008A, B, C and E bonds initially bear interest at the weekly rate and the series 2008D bonds initially bear interest at the daily rate. Each series of bonds may be subsequently converted to a daily, weekly, commercial paper or fixed interest rate mode. While in the daily and weekly rate modes, interest payments are made on the first business day of each month, commencing June 2, 2008. Bondholders have the option to tender their bonds in the daily and weekly rate modes with prior notice of the purchase to the remarketing agent and the trustee. Each series of bonds are subject to mandatory tender: on the day following the last day of each Commercial Paper Rate Period, on the day following the last day of each Fixed Rate Period of six months or less, each conversion date; on the date the LOC is substituted; on the last business day that is at least five days prior to expiration of the LOC; on any business day selected by the Authority and on the business day immediately following the trustee's receipt of a notice of an event of default under the reimbursement agreement. Optional and mandatory redemption provisions also apply to the bonds.

Proceeds of the bonds will be used to refund the Maryland Health and Higher Educational Facilities Authority's outstanding (i) Revenue bonds, University of Maryland Medical System Issue, series 2006B, (ii) Revenue bonds, University of Maryland Medical System Issue, series 2006C, (iii) Revenue bonds, University of Maryland Medical System Issue, series 2006D, (iv) Revenue bonds, University of Maryland Medical System Issue, series 2006E and (v) Revenue bonds, University of Maryland Medical System Issue, series 2006F.

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.