Fitch Affirms University of Central Florida's Health Center Revs at 'A-'; Outlook Stable

Fitch Ratings affirms its unenhanced 'A-' rating on the approximately $6.8 million of outstanding State of Florida, Florida Education System, University of Central Florida (UCF), student health center revenue bonds, series 2004A. The bonds are payable solely from and secured by a lien on the student health fee, plus investment earnings thereon. The Rating Outlook is Stable.

The 'A-' rating is supported by the strong debt service coverage generated by the student health center and growing enrollment at UCF. Credit concerns include the ongoing capital needs to accommodate enrollment growth. Should UCF continue to manage the demands of an increasing enrollment base on its student health center, while at the same time maintaining strong operating margins and debt service coverage, upward rating movement on the student health center revenue bonds is possible. Fitch continues to monitor the potential impact of funding reductions from the state of Florida on UCF's credit profile. To date, such reductions, which have been minimal, have not materially impacted UCF's enrollment levels or financial performance. Fitch will continue to monitor this aspect of the credit going forward.

Student health center revenue bonds are primarily supported by a student health fee and a debt service revenue fund. The student health fee, currently $8.59 per credit hour, is charged to all students located at UCF's main campus in Orlando. The student health fee, along with the activity and service fee and the athletic fee combined may not exceed 40% of a student's tuition. The student health center fee is also used to support operations after debt service. For fiscal 2008, the pledged revenues of the student health center totaled $8.96 million and covered maximum annual debt service of $621,000 by a strong 14.4 times.

UCF is one of 11 institutions of public higher education in the State University System of Florida (currently rated 'AA' by Fitch). Fall 2008 headcount enrollment was 50,275, up 3.2% from fall 2007. The majority of students are located at UCF's main campus in Orlando, FL.

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