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Fitch to Confirm Raleigh, North Carolina 'AA' 2004A VR COPs; Upgrade S-T to 'F1+'.

NEW YORK -- Fitch Ratings will confirm the long-term 'AA' rating assigned to Raleigh North Carolina's (the city) $55,000,000 million of outstanding variable rate certificates of participation (COPs), series 2004A. Fitch will also upgrade the city's short-term rating to 'F1+' from 'F1.' These rating actions are in connection with the city's plan to convert the bonds to an initial long-term interest rate mode.

The rating confirmation and upgrade will be effective on the conversion date of Jan. 21, 2009 at which time the following will occur: (i) the bonds will be converted from a weekly rate mode to an initial long-term interest rate mode; (ii) Fitch will upgrade the short-term rating to 'F1+' based on Fitch's assessment of the city's own liquidity; and (iii) the liquidity facility provided in the form of a standby bond purchase agreement issued by DEPFA Bank PLC will terminate on the business date following the conversion date and the 'F1' liquidity enhanced rating on the bonds will be withdrawn. The initial long-term rate mode will end on Jan. 15, 2010.

During this initial long-term rate mode, interest on the bonds will be payable on June 1, 2009, Dec. 1, 2009 and the day next succeeding the last day of the initial long-term interest rate period. The bonds will be subject to mandatory tender on the purchase date of Jan. 16, 2010 to be paid from remarketing proceeds. To the extent that remarketing proceeds are unavailable to pay the purchase price, the city is obligated to pay the purchase price. If the city fails to pay the purchase price on the purchase date, the bonds are immediately due and payable on the next succeeding business day.

At the end of the initial long-term interest rate period, the city will have the option to convert the bonds to either: (i) a daily interest rate; (ii) a weekly interest rate; (iii) a bond interest term rate; (iv) or a new long-term interest rate. Conversion to a daily interest rate, weekly interest rate or bond interest term rate is contingent upon the city first obtaining a commitment for a liquidity facility. Should the city fail to obtain the required liquidity facility, the city shall establish a new long-term interest rate period. Establishment of another long-term interest rate period does not require the city to obtain a liquidity facility to pay the purchase price for the mandatory tender.

The current remarketing agent, Citigroup Global Markets, Inc., will be replaced by RBC Capital Markets Corporation.

Fitch also confirms the following outstanding rating for the city with a Stable Rating Outlook:

--$188,425,000 downtown improvement COPs at 'AA'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.
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Publication:Business Wire
Date:Jan 8, 2009
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