OREANDA-NEWS. On the effective date of Nov. 18, 2015, Fitch Ratings will take the following rating actions on the State of California's variable rate general obligation (kindergarten-university public education facilities bonds) series 2005A2-1, 2005A3, 2005B1 and 2005B3:

--Upgrade the long-term rating to 'A+' from 'A' and affirm the short-term 'F1' rating assigned to the series 2005A2-1 and series 2005B3 bonds;
--Affirm the long and short-term 'A+/F1' rating assigned to the series 2005A3 and series 2005B1 bonds.

The Rating Outlook for the long-term rating is Stable. The rating action is in connection with: (i) the substitution of the irrevocable direct-pay letters of credit (LOCs) previously provided by Barclays Bank, PLC (rated 'A/F1', Stable Outlook, for the series 2005A2-1 and 2005B3) with substitute LOCs issued by Sumitomo Mitsui Banking Corporation (rated 'A-/F1', Stable Outlook)and ii) the substitution of the LOCs previously provided by Bank of America, N.A. (rated 'A+/F1', Stable Outlook, for the series 2005A3 and 2005B1) with substitute LOCs issued by Mizuho Bank, Ltd. (rated 'A-/F1', Stable Outlook). The bonds will be subject to mandatory tender on Nov. 18, 2015.

KEY RATING DRIVERS:
The long-term 'A+' rating will be based on the higher of the underlying long-term rating assigned to the bonds by Fitch (currently rated 'A+', Stable Outlook), and the long-term rating assigned by Fitch to Sumitomo Mitsui Banking Corporation (rated 'A-/F1', Stable Outlook) for the series 2005A2-1 and 2005B3 and Mizuho Bank, Ltd. (rated 'A-/F1', Stable Outlook) for the series 2005A3 and 2005B1. The initial LOC stated expiration dates for the series 2005A2-1 and 2005B3 LOCs are Nov. 16, 2018 and Nov. 15, 2019 for the series 2005A3 and 2005B1 LOCs, unless extended or earlier terminated, during the weekly interest rate mode only. The short-term 'F1' rating will be based solely on the respective LOC. For information about the underlying credit rating see press release 'State of California General Obligation Bonds, dated Oct. 7, 2015 available at 'www.fitchratings.com'.

Pursuant to the substitute LOCs, each respective bank is obligated to make regularly scheduled payments of principal of and interest on the bonds in addition to payments due upon maturity, and redemption, as well as purchase price for tendered bonds. Additionally, the bond obligor is in the flow of funds to make timely payments of principal and interest due upon maturity, and redemption.

The Sumitomo Mitsui Banking Corporation and Mizuho Bank, Ltd. substitute LOCs provide full and sufficient coverage of principal plus an amount equal to 35 days of accrued interest at a maximum rate of 11% based on a year of 365 days and purchase price for tendered bonds, while in the weekly rate modes. On the effective date, the Remarketing Agents for the bonds will be Jefferies LLC for the series 2005A2-1, Mizuho Securities USA, Inc. for the series 2005A3, Citigroup Global Markets Inc. for the series 2005B1 and Merrill Lynch, Pierce, Fenner & Smith Incorporated for series 2005B3.

RATING SENSITIVITIES
The long-term rating is tied to the Fitch long-term rating assigned to the bond obligor and the long-term rating that Fitch maintains on the respective substitute bank providing the LOC. Changes to one or both of these ratings may affect the long-term rating assigned to the bonds.

The short-term rating is exclusively tied to the short-term rating that Fitch maintains on the respective bank providing the substitute LOC and will reflect all changes to that rating.