Fitch to Rate CO Agr Dev Auth $3.3MM VRDBs (Garrett & Carla DeVries Family Tr. Proj) 2006 'AA-/F1+'

On the effective date of April 29, 2015, Fitch Ratings will assign a rating of 'AA-/F1+' to the $3,300,000 Colorado Agricultural Development Authority variable rate demand agricultural development revenue bonds (Garrett & Carla DeVries Family Trust Project), series 2006.

KEY RATING DRIVERS

The rating is based on the support provided by an irrevocable direct-pay substitute letter of credit (LOC) issued by CoBank ACB, (rated 'AA-/F1+', Stable Outlook). The bonds are currently outstanding and supported by a LOC issued by Bank of the West. Fitch will be assigning a rating to the bonds for the first time in connection with the provision of the substitute LOC provided by CoBank, ACB.

The LOC bank is obligated to make payments of principal of and interest on the bonds upon maturity, acceleration and redemption, as well as purchase price for tendered bonds. The rating will expire upon the earliest of: (a) April 29, 2016, the stated expiration date of the LOC, unless such date is automatically extended for one-year periods; (b) conversion to a fixed interest rate; (c) any prior termination of the LOC; and (d) defeasance of the bonds. The LOC provides full and sufficient coverage of principal plus an amount equal to 109 days of interest at a maximum rate of 10% based on a year of 365 days and purchase price for tendered bonds, while in the variable (weekly) rate mode. The Remarketing Agent for the bonds is The Frazer Lanier Company, Inc. The bonds are expected to be reoffered on April 26, 2015.

The bonds bear interest at a weekly rate, but may be converted to a fixed interest rate. While bonds bear interest in the variable rate mode, interest payments are on the first Thursday of each September, December, March and June. The next scheduled interest payment is June 4, 2015. The trustee is obligated to make timely draws on the LOC to pay principal, interest, and purchase price. Funds drawn under the LOC are invested in accordance with rating guidelines and mature when needed, and are free from any lien prior to that of the bondholders. Holders may tender their bonds on any business day, provided the trustee and remarketing agent are given the requisite prior notice of the purchase. The bonds are subject to mandatory tender: (1) upon conversion to the fixed interest rate; (2); upon substitution of the LOC; and (3) following receipt of written notice from the bank of an event of default under the reimbursement agreement directing a mandatory tender. The bank has the option of directing an acceleration rather than a mandatory tender upon an event of default under the reimbursement agreement. The bonds shall be accelerated following the trustee's receipt of notice of non-reinstatement of the LOC interest. Optional and mandatory redemption provisions also apply to the bonds, including a mandatory redemption upon expiration of the LOC. There are no provisions for the issuance of additional bonds.

Bond proceeds were used to finance the acquisition, construction and equipping of certain solid waste disposal components of the borrower's dairy facility.

RATING SENSITIVITIES

The rating is exclusively tied to the short- and long-term rating that Fitch maintains on the bank providing the LOC 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. 23, 2015);
--'Rating Guidelines for Letter of Credit-Supported Bonds and Commercial Paper' (June 2, 2014).

Applicable Criteria and Related Research:
U.S. Municipal Structured Finance Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=862222
Rating Guidelines for Letter of Credit-Supported Bonds and Commercial Paper
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=749431

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