OREANDA-NEWS. Fitch Ratings has assigned a rating of 'AAApre' to the Alameda Corridor Transportation Authority (the authority) tax-exempt subordinate lien revenue bonds, consisting of: $219,395,000 capital appreciation bonds (CABs), maturing Oct. 1, 2016-2020 (partial refunding of 2017-2020 maturities, all calculated at the accreted value at maturity); and $428,390,000 convertible capital appreciation bonds (CIBs), maturing Oct. 1, 2021- 2025 (calculated at accreted value at date of conversion to current interest bonds, Oct. 1, 2012). The bonds were refunded on May 24, 2016 with proceeds of the authority's tax-exempt $34,280,000 subordinate lien revenue refunding bonds, series 2016A and $556,860,000 second subordinate lien revenue refunding bonds, series 2016B.

The Rating Outlook is Stable.

KEY RATING DRIVERS:

The 'AAApre'/Stable Outlook rating is based on the pledge of securities in a special irrevocable escrow fund securing the refunded bonds and reflects the lien of the refunded bondholders on the escrow fund and that all amounts have been invested in direct non-callable obligations of the United States. The U. S. full faith and credit is currently rated 'AAA'/Stable Outlook.

The ratings apply to the refunded bonds referenced above and by CUSIP numbers, below.

Pursuant to an irrevocable escrow agreement, U. S. Bank National Association, acting as escrow agent, holds an irrevocable escrow fund, in trust for the benefit of the refunded bondholders. All cash and securities are held in the escrow fund for the exclusive benefit of the refunded bondholders and will be used for the payment when due of interest and principal upon maturity or earlier redemption on the refunded bonds. In the future, any substitute or additional investments must be limited to direct non-callable U. S. government obligations or stripped interest coupons of the Resolution Trust Corporation. The refunded CABs will be escrowed to maturity. The refunded CIBs will be redeemed at par plus accrued interest on Oct. 1, 2017.

Causey Demgen & Moore P. C. verified the mathematical accuracy of computations relating to the adequacy of income from escrowed funds to pay debt service requirements of the refunded bonds. These computations were contained in schedules provided to them by Bank of America Merrill Lynch as underwriter for the refunding bonds. According to the verification report, the securities and cash deposited will produce amounts necessary for timely payment of the principal and interest on the refunded bonds. Prior to accepting substitute investments or disbursing funds, the escrow agent must receive a new report verifying the continued sufficiency of escrowed funds to meet all future payments of principal and interest on the refunded bonds when due.

RATING SENSITIVITIES

The rating is exclusively tied to the U. S. sovereign creditworthiness and will reflect all changes to that rating.

The 'AAApre'/Stable Outlook rating applies to bonds with the following CUSIP numbers:

010869DP7

010869HK4

010869HL2

010869HM0

010869HN8

010869EL5

010869EM3

010869EN1

010869EP6

010869EQ4