Fitch to Revise S-T Rating to 'F1' on $80.88MM AK Housing Finance Corp Rev Bonds Ser 2009A

On the effective date of July 1, 2014, Fitch Ratings will revise the short-term rating to 'F1' from 'F1+' assigned to the $80,880,000 Alaska Housing Finance Corporation home mortgage revenue bonds series 2009A. The rating action is in connection with: (i) the substitution of the liquidity support provided with internal resources of the Alaska Housing Finance Corporation (issuer) (rated 'AA+/F1+'; Stable Outlook by Fitch) with a Standby Bond Purchase Agreement (SBPA) to be issued by The Bank of Tokyo- Mitsubishi UFJ, LTD. ('BTMU' rated 'A/F1'; Stable Outlook); and (ii) the mandatory tender of the bonds, which will occur on July 1, 2014.

KEY RATING DRIVERS

On the effective date, the short-term 'F1' rating will be based on the liquidity support provided by BTMJ in the form of a SBPA. The long-term rating continues to be based on the general obligation bond rating assigned to the issuer. The Rating Outlook is Stable, for the long-term rating. For more information on the long-term rating, see the press release dated April 14, 2014 available on Fitch's website at www.fitchratings.com.

The substitute SBPA provides for the payment of the principal component of purchase price plus an amount equal to 184 days of interest calculated at a maximum rate of 12%, based on a year of 365 days for tendered bonds during the 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 substitute SBPA will expire on June 28, 2019, the stated expiration date, unless such date is extended, conversion to any interest rate mode other than weekly or upon the occurrence of certain other 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 short-term 'F1' rating will expire on the expiration or prior termination of the SBPA. A mandatory tender of the bonds is scheduled to occur on effective date of the SBPA on July 1, 2014. The remarketing agent for the bonds is Morgan Stanley & Co. LLC.

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.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Criteria' (Feb. 24, 2014);

--'Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support' (Jan. 27, 2014).

Applicable Criteria and Related Research:

Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=730736

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736618

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