OREANDA-NEWS. On the effective date of Oct. 14, 2015, Fitch Ratings will downgrade the Short-Term ratings assigned to the City of Raleigh, North Carolina Combined Enterprise System Revenue Bonds, $78,880,000 series 2008A and $52,595,000 series 2008B to 'F1' from 'F1+'. The rating action is in connection with (i) the substitution of the liquidity support provided by Wells Fargo Bank, N.A. (rated 'AA/F1+'; Stable Outlook by Fitch) in the form of two Standby Bond Purchase Agreements (SBPAs), with substitute SBPAs to be issued by Bank of America, N.A. (rated 'A+/F1'; Stable Outlook); and (ii) the mandatory tender of the bonds, which will occur on Oct. 14, 2015.

KEY RATING DRIVERS

On the effective date, the Short-Term 'F1' rating will be based on the liquidity support provided by Bank of America, in the form of the substitute SBPAs. The Long-Term rating will continue to be based on the 'AAA' rating assigned by Fitch to the bonds. The Rating Outlook is Stable for the Long-Term rating. For more information on the long-term rating, see the report dated March 4, 2015, available on Fitch's website at www.fitchratings.com.

The substitute SBPAs provide 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 or weekly rate modes 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 substitute SBPAs will expire on Oct. 14, 2018, the stated expiration date, unless such date is extended, conversion to a mode other than the daily or weekly rate; or upon the occurrence of certain events of default which result in a mandatory tender or other events of default related to the credit of the bonds which result in an automatic and immediate termination. Merrill Lynch, Pierce, Fenner & Smith Incorporated will serve as the remarketing agent for 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 bonds. The long-term rating is exclusively tied to the creditworthiness of the bonds and will reflect all changes to that rating.