Fitch Rates Northside ISD, Texas' 2006A Refunding Bonds 'AAA/F1+'.

NEW YORK -- Fitch Ratings assigns a rating of 'AAA/F1+' to the $36,730,000 Northside Independent School District (ISD), TX, variable-rate unlimited tax refunding bonds, series 2006A. The long-term 'AAA' rating is based on the guarantee provided by the Permanent School Fund of Texas (PSF; financial strength rated 'AAA' by Fitch). The PSF guarantees all principal and interest payments due on the bonds. The 'F1+' short-term rating assigned to the bonds is based on the liquidity support of a standby bond purchase agreement (SBPA) issued by Dexia Credit Local, acting through its New York Branch.

The SBPA provides for the payment of the purchase price of tendered bonds during the initial and variable rate modes in the event the proceeds of a remarketing of the bonds following a tender are insufficient to pay the purchase price. The SBPA is sized to provide for the entire principal amount of the bonds and 187 days of interest at the maximum interest rate of 15%, and will expire on Aug. 15, 2011, unless such date is extended, or upon the occurrence of other events of termination, according to its terms. Fitch's short-term rating on the bonds will expire upon any expiration or termination of the SBPA. A.G. Edwards & Sons, Inc. is the remarketing agent for the bonds. The bonds are expected to be delivered on or about May 4, 2006.

The initial rate period will extend from the closing date to and including July 31, 2007. The initial rate will be a set term rate, with the interest payment dates during the initial rate period occurring on Aug. 1, 2006 and each Feb. 1 and Aug. 1 through Aug. 1, 2007. Thereafter, the bonds will bear interest at a term rate to be determined by the remarketing agent. After such term rate, the bonds may remain in the term rate mode or may be converted to a weekly, monthly, quarterly, semiannual, flexible or fixed-rate mode.

Bondholders are required to tender their bonds for purchase at the end of the initial rate period. Bonds are also subject to mandatory tender upon: the conversion to a variable rate, flexible rate or fixed interest rate mode; on the business day preceding the expiration or termination of the SBPA; and on the business day preceding the of delivery of a substitute liquidity facility, unless such substitution will not cause a reduction or withdrawal of the rating on the bonds. Bonds are also subject to purchase in lieu of redemption pursuant to the terms of the bond Order.

For additional information on the Northside ISD's underlying rating, see Fitch's press release dated March 30, 2006 ('Fitch Rates Northside ISD, TX's $175MM Unltd Tax Rfdg Bonds 'AA-'') and available 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.