Fitch Rates & Affirms Preferred Shares Issued by Nuveen Closed End Fund

Fitch Ratings affirms its 'AAA/F1+' rating on the Series 1 Variable Rate Demand Preferred Shares (VRDP Shares) issued by Nuveen New Jersey Dividend Advantage Municipal Fund (NXJ) after the issuance today of an additional $36 million in Series 1 VRDP Shares in connection with the refinancing described below. Fitch also affirms the long-term and short-term ratings for two additional existing series of VRDP Shares issued by NXJ that are not impacted by the refinancing. NXJ is managed by Nuveen Fund Advisors, LLC (NFA) and subadvised by Nuveen Asset Management, LLC (NAM).

Fitch takes the following rating actions on the series of preferred shares noted below:

--$81,000,000 of VRDP Shares Series 1, final mandatory redemption on Aug. 3, 2043, affirmed at 'AAA/F1+'. The liquidity provider is The Toronto-Dominion Bank (TD Bank, 'AA-/F1+');

--$144,300,000 of VRDP Shares, Series 2, final mandatory redemption on April 1, 2043, affirmed at 'AAA/F1+'. The liquidity provider is Royal Bank of Canada (RBC, 'AA/F1+');

--$88,600,000 of VRDP Shares, Series 3, final mandatory redemption on April 1, 2043, affirmed at 'AAA/F1+'. The liquidity provider is Royal Bank of Canada (RBC, 'AA/F1+').

KEY RATING DRIVERS

The short-term ratings of the VRDP Shares primarily reflect:

--The credit strength of the liquidity providers for the NXJ VRDP Shares;

--The terms and conditions of the purchase agreements of the VRDP Shares.

The 'AAA' long-term ratings of the VRDP Shares primarily reflect:

--Sufficient asset coverage provided to the VRDP Shares as calculated per the NXJ overcollateralization (OC) tests.

--The structural protections afforded by mandatory de-leveraging provisions in the event of asset coverage declines.

--The legal and regulatory parameters that govern NXJ operations.

--Both the short- and long-term ratings also reflect the capabilities of NFA as investment advisor and NAM as subadvisor.

THE REFINANCING

Today, NXJ has issued an additional $36 million of Series 1 VRDP Shares, increasing the amount outstanding from from $45 million to $81 million. NXJ will use the proceeds of this additional issuance to fully redeem its outstanding MuniFund Term Preferred Shares (MTP Shares). The proceeds of the additional Series 1 VRDP Shares issued will be deposited irrevocably in an escrow account with the MTP Shares redemption agent pending the required 10-day notification period to MTP shareholders. Accordingly the issuance of additional Series 1 VRDP Shares will not adversely affect the ratings of the existing MTP Shares while they remain outstanding. The amount deposited with NXJ's redemption agent will equal the liquidation preference of the MTP Shares and any accumulated and unpaid dividends. When the notification requirement has passed, Fitch expects the outstanding MTP Shares to be redeemed using the escrowed Series 1 VRDP Share proceeds, which will then be marked paid in full by Fitch.

FUND PROFILE

NXJ is a closed-end management investment company regulated by the Investment Company Act of 1940. NXJ invests in municipal securities that are exempt from regular federal and New Jersey income taxes. NXJ may invest up to 20% of assets in below investment grade and or unrated securities.

FUND LEVERAGE

As of Dec. 31, 2014, NXJ had approximately $1.090 billion in assets. Total leverage on a pro forma basis, consists of $313.9 million of VRDP Shares and $97.6 million of tender option bond obligations.

ASSET COVERAGE

As of Dec. 31, 2014, NXJ's total pro forma asset coverage ratio for the above noted VRDP Shares, including the impact of the additional Series 1 issuance, as calculated in accordance with the Investment Company Act of 1940, was in excess of the minimum asset coverage threshold of 225% currently set by the terms of the preferred shares.

As of Dec. 31, 2014, the pro forma effective leverage ratio for NXJ, including the impact of the additional Series 1 issuance, was 39%. This effective leverage ratio is below the 45% maximum effective leverage ratio allowed by the governing documents of the applicable VRDP Shares.

STRUCTURAL PROTECTIONS

Minimum asset coverage compliance for the VRDP Shares is tested monthly and compliance with the effective leverage ratio is tested daily. A breach of the asset coverage threshold requires NXJ to redeem sufficient VRDP Shares to restore compliance.

For the VRDP Shares of each applicable series, a breach of the effective leverage ratio is a breach of the fee agreement with the liquidity provider, and, at the option of the liquidity provider, may result in mandatory tender of VRDP Shares of the applicable series for remarketing (see VRDP Purchase Obligation section below for additional details). However, in the event of a breach, Fitch expects NXJ to redeem a sufficient number of preferred shares or reduce the amount of tender option bonds (TOBs) in order to restore compliance.

For the minimum asset coverage and effective leverage ratio tests, the total market value exposure periods (i.e. the pre-specified time period allotted for valuation, cure and redemption in the event of a breach) are within the 60 business day guidelines provided in Fitch's criteria.

VRDP PURCHASE OBLIGATION

The short-term rating assigned to each series of VRDP Shares is directly linked to the short-term creditworthiness of the applicable liquidity provider. The VRDP Shares of each series are supported by a purchase agreement to ensure full and timely repayment of all tendered VRDP Shares of the applicable series plus any accumulated and unpaid dividends. The purchase agreement is unconditional and irrevocable.

The VRDP purchase agreement requires the liquidity provider to purchase all VRDP Shares of the applicable series tendered for sale that were not successfully remarketed. The liquidity provider must also purchase all outstanding VRDP Shares of the applicable series if NXJ has not obtained an alternate purchase agreement prior to the termination of the purchase agreement being replaced or following the downgrade of the liquidity provider's rating below 'F2' (or equivalent).

The role of the liquidity provider under the fee agreement relating to the purchase obligation has a scheduled termination date. Subsequent to the scheduled termination date, the fee agreement can be extended with the existing liquidity provider, or a new liquidity provider may be selected. Any future changes to the terms of the fee agreements or any prospective replacement that weakens the structural protections discussed above may have negative rating implications.

STRESS TESTS

Fitch performed various stress tests on NXJ to assess the strength of the structural protections available to the preferred shares compared to the stresses outlined in Fitch's closed-end fund rating criteria. These tests included determining various 'worst case' scenarios where the NXJ's leverage and portfolio composition migrated to the outer limits of its operating and investment guidelines.

Only under remote circumstances, such as increasing NXJ's issuer concentration, while simultaneously migrating the portfolios to a mix of 80% long-term 'BBB' 10+ years to maturity bonds and 20% high yield bonds, did the asset coverage available to the VRDP Shares fall below the 'AAA' threshold, and instead passed at a 'AA' rating level.

Given the highly unlikely nature of the stress scenarios, and the minimal rating impact, Fitch views the NXJ's permitted investments, municipal issuer diversification framework and mandatory deleveraging mechanisms as consistent with an 'AAA' rating.

THE ADVISOR

The investment advisor for NXJ is NFA, a subsidiary of Nuveen Investments. NFA is responsible for the fund's overall investment strategies and their implementation. The sub-advisor, NAM, is a subsidiary of NFA that oversees the day-to-day operations of NXJ. Nuveen Investments and its affiliates had approximately $229 billion of assets under management as of Sept. 30, 2014.

RATINGS SENSITIVITIES

The ratings assigned to the VRDP Shares may be sensitive to material changes in the leverage composition, portfolio credit quality or market risk of NXJ, as described above. A material adverse deviation from Fitch guidelines for any key rating driver could cause ratings to be lowered by Fitch.

Certain terms relevant to key structural protections of the VRDP Shares of each series, including the minimum asset coverage and the effective leverage ratio are set forth in the fee agreements relating to the purchase agreements and are renewed on a periodic basis. Any future changes to these terms that weaken the structural protections may have negative rating implications.

The short-term ratings assigned to the VRDP Shares of each series may also be sensitive to changes in the financial condition of the liquidity provider. A downgrade of the liquidity provider to 'F2' would result in a downgrade of the short-term ratings of the VRDP Shares of the applicable series to 'F2,' absent other mitigants. A downgrade below 'F2', on the other hand, would not necessarily result in a downgrade of the short-term rating of the VRDP Shares, given the features in the transactions that would result in a mandatory tender of the VRDP Shares for remarketing, or purchase by the liquidity provider in the event of a failed remarketing.

NXJ has the ability to assume economic leverage through derivative transactions which may not be captured by the minimum asset coverage test or effective leverage ratio. NXJ does not currently engage in derivative activity and does not envision engaging in material amounts of such activity in the future. In fact, such activity is limited by the investment guidelines of NXJ and could run counter to its investment objectives of achieving tax-exempt income. Material derivative exposures in the future could have potential negative rating implications if it adversely affects asset coverage available to rated preferred shares.

For additional information about Fitch rating guidelines applicable to debt and preferred stock issued by closed-end funds, please review the criteria referenced below, which can be found on Fitch's web site at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

The sources of information used to assess this rating were the public domain and Nuveen Fund Advisors.

Opt-in to receive Fitch's forthcoming research on closed-end fund:

http://pages.fitchemail.fitchratings.com/FAMCEFBlankOptin/

Applicable Criteria and Related Research:

--'Rating Closed-End Fund Debt and Preferred Stock' (Sept. 4, 2014);

--'Global Rating Criteria for Asset-Backed Commercial Paper' (Oct. 30, 2014);

--'Leveraged Closed-End Funds Weather U.S. Rate Shock Scenarios' (Oct. 7, 2014);

--'Municipal CEFs Refinance Pre-Crisis ARPS' (May 3, 2012).

Applicable Criteria and Related Research:

Rating Closed-End Fund Debt and Preferred Stock

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=765528

Global Rating Criteria for Asset-Backed Commercial Paper

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=797648

Leveraged Closed-End Funds Weather U.S. Rate Shock Scenarios (Impact on Asset Coverage and Ratings Limited Due to Structural Protections)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=784190

Municipal CEFs Refinance Pre-Crisis ARPS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=677576

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=978831

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.