OREANDA-NEWS. Fitch Ratings has assigned a rating of 'AA+'/'F1' to the $31,000,000 City of Raleigh, NC variable rate limited obligation refunding bonds, series 2016A. The Rating Outlook is Stable for the long-term rating.

KEY RATING DRIVERS:

The 'AA+' long-term rating and Stable Outlook are based on the credit quality of the City of Raleigh. For more information on the long-term rating, see Fitch's press release dated May 26, 2016, available on Fitch's website at www. fitchratings. com'.

The short-term 'F1' rating is based on the liquidity support provided by PNC Bank, N. A. (rated 'A+/F1'/Stable Outlook) in the form of a Standby Bond Purchase Agreement (SBPA), which has a stated expiration date of May 31, 2019, during the daily and weekly interest rate modes.

The SBPA provides for the payment of the principal component of purchase price plus an amount equal to 35 days of interest calculated at a maximum rate of 12%, based on a year of 365 days for tendered bonds during the daily and weekly rate mode in the event that the proceeds of a remarketing of the bonds are insufficient to pay the purchase price following an optional or mandatory tender. The SBPA will expire on May 31, 2019, the stated expiration date, unless such date is extended, conversion to a mode other than daily or weekly rate, or upon the occurrence of certain events of default which result in a mandatory tender or other termination events related to the credit of the bond obligor which result in an automatic and immediate termination. The remarketing agent for the bonds is PNC Capital Markets LLC.

The bonds will be issued in the weekly rate mode, but may be converted to a daily, bond interest term, or long-term rate. While bonds bear interest in the daily or weekly rate mode, interest is paid on the first business day of each month. Holders of bonds bearing interest in the daily or weekly rate mode may tender their bonds for purchase with the requisite prior notice. The trustee is obligated to make timely draws on the SBPA to pay purchase price in the event of insufficient remarketing proceeds, and in connection with the expiration or termination of the SBPA, except in the case of the credit-related events permitting immediate termination or suspension of the SBPA.

Funds drawn under the SBPA are held uninvested, and are free from any lien prior to that of the bondholders. The bonds are subject to mandatory tender: (1) upon conversion of the interest rate mode; (2) upon expiration, substitution or termination of the SBPA; and (3) following the receipt of written notice from the bank of an event of default under the SBPA, directing such mandatory tender. Optional and mandatory redemption provisions also apply to the bonds.

RATING SENSITIVITIES

The short-term rating reflects the short-term rating that Fitch maintains on the bank providing liquidity support and will be adjusted upward or downward in conjunction with the short-term rating of the bank and, in some cases, the long-term rating of the bond obligor. The long-term rating is exclusively tied to the creditworthiness of the bond obligor and will reflect all changes to that rating.