Fitch Releases Nonrated Descriptive Report on Skyline at First Hill Project, Washington.

TAMPA, Fla. -- On Tuesday, January 23, 2007, Fitch expects to release a non-rated descriptive report on approximately $214.8 million Washington Housing Finance Commission Non-Profit Revenue Bonds (Skyline at First Hill Project), Series 2007A-D. Fitch's descriptive credit report provides analysis of significant credit factors and includes Fitch's evaluation of the strengths and risks surrounding this credit. Generally, Fitch regards unenhanced debt issued with financial characteristics similar to the described facility as being below investment grade. The bonds are expected to sell during the week of Feb. 5, 2007 via negotiation through Ziegler Capital Markets Group.

Proceeds of the series 2007 bonds, together with other funds, will be used to construct a new Type-A continuing care retirement community in the First Hill neighborhood of Seattle, WA, fund capitalized interest, working capital, various trustee-held accounts including debt service reserve fund and associated costs of issuance. When completed, Skyline at First Hill will consist of 199 independent living apartments, 60 traditional assisted living units, 16 memory support assisted living units and 34 skilled nursing beds plus associated common areas.

The positive credit attributes of the Skyline at First Hill (Skyline) project include the strong velocity of pre-sale deposits, sponsorship from an experienced CCRC operator, solid forecasted buildup of liquidity and strong service area demographics. As of Dec. 22, 2006 Skyline has received 10% entrance fee deposits on approximately 63.3% of the Independent Living Units (ILUs), which is somewhat low for a start-up community. However, the rate of sales (or velocity) has been robust indicating solid demand in the market. Pre-sales have averaged 14 per month since Skyline began accepting deposits in April 2006, which is well-above industry norms. Skyline is an affiliate of Pacific Retirement Communities Northwest (PRCN) which currently owns and operates 2 CCRC facilities in the Seattle metropolitan area. Fitch believes PRCN knowledge and experience in local will be beneficial in marketing and operating Skyline. The feasibility study projects unrestricted cash and investments to build up to $27.1 million by fiscal 2012 which translates to 509 days cash on hand.

Fitch's main credit concern is the competitive nature of the service area as evidenced by above-average penetration rates; a high debt burden with maximum annual debt service (MADS) as a percentage of revenue being over 30% after pay down of the short term variable-rate debt and relatively low forecasted coverage of 1.3 times (x) in 2012. With six competing facilities located with six miles of the community, the gross and net penetration rates of 19.2% and 12.5%, respectively, to be high compared to other projects reviewed by Fitch.

Fitch believes that start-up retirement communities do not possess a credit profile to be rated in the investment-grade category.

For a copy of Fitch's credit analysis, visit the Fitch Ratings web site at www.fitchratings.com or contact Fitch at 1-800-893-4824.

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. The ratings above have been initiated by Fitch as a service to investors. The issuer did not participate in the rating process other than through the medium of its public disclosure.