OREANDA-NEWS. Fitch Ratings has affirmed the following Chickasaw Nation, OK (the Nation) bonds:

--$9.6 million health system bonds series 2007 at 'BBB'.

The Rating Outlook is Stable.

SECURITY

The bonds are payable from the Nation's full faith and credit, limited to the net available assets of the government, and further payable from the health system revenues (Medicare, Medicaid, and private insurance).

The Nation granted a limited waiver of sovereign immunity in conjunction with the bonds. The Nation has agreed to submit to jurisdiction of federal and state courts and that any claim or controversy related to the series 2007 bonds documents may be resolved by arbitration.

KEY RATING DRIVERS

STRONG FINANCIALS; REVENUE CONCENTRATION: The Nation continues to realize strong performance across governmental and enterprise operations, including health system and casino operations, the latter representing a highly concentrated revenue source supporting the nation's governmental functions.

SOLID ENTERPRISE POSITION: The gaming enterprise's financial performance remains strong and the enterprise benefits from a solid position in the competitive Oklahoma City market and the Dallas feeder market. Risks to gaming operations include the ongoing threat of gaming legalization in Texas, which Fitch continues to monitor but views as a remote risk in the near term.

HEALTHCARE ESSENTIALITY; AMPLE COVERAGE: Stable performance of the nation's essential healthcare operation results from volume gains reflected in steady growth of the Indian Health Services' (IHS) funding and third-party pledged revenues, and surplus operating results. Significant improvement in gross coverage results from growth of pledged third-party health revenues and aggressive early debt retirement.

ROBUST GOVERNMENTAL BALANCES: The Nation's general fund has accumulated very high fund and cash balances over the past few years due to the increased amount of gaming fund transfers. The Nation has a practice of maintaining general fund cash balances equal to at least one-year of budgeted spending.

TIGHT LEGAL SAFEGUARDS/EXCESS COVENANT RESERVES: Solid legal protections include a daily sweep of pledged revenues to a trustee-held lock-box and multiple liquidity reserve requirements, all of which the Nation exceeds.

RATING SENSITIVITIES

SHIFT IN HEALTH SYSTEM PERFORMANCE: A shift in the currently strong performance of the health system and/or declines in the pledged third-party revenues could influence the rating.

REVENUE CONCENTRATION: As the gaming enterprise fully supports the Nation's services, any material decline in enterprise performance would have an adverse effect on the rating.

CREDIT PROFILE

The Chickasaw Nation is the 12th largest federally recognized tribe in the U.S. The majority of its more than 62,000 citizens live within the 13 counties in southern and central Oklahoma or other parts of the state.

The Nation is governed by a tri-partite constitutional governmental structure. The current governor is in his eigth consecutive term and is not term limited.

STRONG GAMING REVENUE GROWTH; TX LEGALIZATION OVERHANG REMAINS

Gaming revenues are the Nation's largest revenue source. More than half of the gaming revenue is derived from the Nation's flagship casino facility, the WinStar World Casino, which is located on the Oklahoma-Texas border and serves the Dallas-Fort Worth (DFW) market.

The Nation's gaming enterprise operating trends are strong, with stable EBITDA margins remaining at 40% - 42% in fiscal years 2012 through 2015. The stability is partly supported by the Nation's considerable reinvestment in its facilities and improved operations at its 20 different gaming facilities. Liquidity at the gaming enterprise consists of $88 million as of Sept. 30, 2015, which just covers day-to-day operations.

An ongoing risk to operations is the possibility of gaming legalization in TX, given the location of the Nation's WinStar World Casino (represented greater than 40% of the Nation's fiscal 2014 gaming EBITDA) near the DFW market. The Nation partially hedged this risk through its acquisition of Lone Star Park in the DFW area in May 2011 via its Global Gaming Solutions, LLC (GGS) and ongoing investments in other casino properties.

ESSENTIAL SERVICE AND STABLE PERFORMANCE OF HEALTH SERVICES

The Nation's IHS user population totaled approximately 36,000 in 2015 and the health system also serves a large number of non-Chickasaw Native Americans from other areas. To accommodate the growing population the Nation opened its $148.5 million replacement hospital in August 2010, funded by the series 2007 bond proceeds and equity. The replacement facility provides significantly expanded inpatient, outpatient, and ancillary capacity to accommodate the expanding utilization levels.

The Nation's total revenues continued to grow in fiscal 2015 driven by an 11.2% increase in third-party collections to $74.3 million, despite relatively flat IHS funding. Growth in overall third-party revenues reflects generally higher volumes. A decline in ambulatory volumes is associated with closure of a clinic operated by the tribe pursuant to a joint venture contract with another tribe.

The Nation covenants to transfer 1.25x maximum annual debt service (MADS) from gaming to the Department of Health for debt service; however, because of the strong gains in third-party revenues, these transfers are not relied on for debt service and have enabled early paydown of debt: $27 million in fiscal 2011 and $28 million in fiscal 2013. Currently there are no further plans for early debt redemption and all debt will retire by 2019. Total governmental debt outstanding is low relative to the significant amount of general fund resources on-hand. Debt service is not a pressure, claiming a modest .6% of fiscal 2014 governmental spending. The nation does not have any defined benefit post-retirement obligations.

SWEEP OF PLEDGED REVENUES; EXCESS COVENANT RESERVES

Pledged health system revenues are swept daily, or when first received, to the trustee-held bond fund account. The bonds are payable both by the Nation's full faith and credit and the third-party revenues, which have experienced good growth. Gross third-party revenues increased 11.3% to $74.3 million in fiscal 2015, covering MADs a high 13.6x.

Additional legal provisions include a liquidity covenant whereby the Nation must maintain $40 million of its governmental net assets in cash and minimum fund equity for the health system of $20 million, including 60 days cash on hand. The Nation comfortably exceeds the liquidity covenants.

GOVERNMENTAL OPERATIONS REMAIN STRONG

Transfers from the gaming enterprise represent an extremely concentrated 90% of general fund sources. The amount of the annual gaming transfers is determined annually by the legislature as part of the Nation's budget process rather than by a set, formal transfer rate. The gaming transfers increased by a sound 5.7% compounded annual average from fiscal years 2012 - 2014. The Nation has increased governmental spending in conjunction with gaming transfers to support enhanced services for health, education, family, and housing. Even with the increased spending the Nation has posted very large operating margins in five of the past six fiscal years.

The Nation has a prudent policy of maintaining at least 100% of the upcoming budget in cash, which provides for a robust fiscal cushion against potential swings in gaming revenue and federal budget actions affecting grant income. The general fund completed fiscal 2014 with a very large unrestricted fund balance of $259 million (2.1x annual spending). Fitch believes that the general fund's ample fiscal cushion and the discretionary nature of the spending increases indicate a good degree of budget flexibility in the event of unforeseen revenue declines from weakened gaming performance.