Fitch to Upgrade S-T Rating on $100M NYC Adj Rate GOs Fiscal 2008 Series D-3, D-4 Bonds

On the effective date of Dec. 3, 2014, Fitch Ratings will upgrade the short-term rating to 'F1+' from 'F1', for the New York City general obligation (GO) bonds, fiscal 2008, series D, $50,000,000 subseries 2008D-3 and $50,000,000 subseries 2008D-4, adjustable rate bonds. The rating action is in connection with: (i) the substitution of the liquidity support provided by Credit Agricole Corporate and Investment Bank (rated 'A/F1', Stable Outlook) in the form of Standby Bond Purchase Agreements (SBPAs), with substitute SBPAs to be issued by Bank of Montreal (rated 'AA-/F1+', Stable Outlook) which will occur on Dec. 3, 2014.

KEY RATING DRIVERS:

On the effective date, the short-term 'F1+' rating will be based on the liquidity support provided by Bank of Montreal, in the form of the substitute SBPAs. The long-term rating continues to be based on the 'AA' rating assigned by Fitch to the New York City GO bonds. The Rating Outlook is Stable, for the long-term rating. For more information on the long-term rating, see the report dated Aug. 8, 2014, available on Fitch's website at www.fitchratings.com.

Each substitute SBPA provides 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 9%, based on a year of 365 days for tendered bonds during the daily and 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 Dec. 3, 2019, the stated expiration date, unless such date is extended, conversion to a mode other than 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. The short-term 'F1+' rating will expire upon the expiration or prior termination of the SBPA. Merrill Lynch & Co. is serving as the remarketing agent for Series D-3, and RBC Capital Markets is serving as the remarketing agent for series D-4.

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 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:

U.S. Municipal Structured Finance Criteria

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

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

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