Fitch to Confirm 'AA-/F1+' Rating on City of Irvine, CA Reassessment Dist. No. 05-21

On the effective date of May 1, 2014, Fitch Ratings will confirm the 'AA-/F1+' rating assigned to the $31,644,000 (currently outstanding), City of Irvine (CA) Reassessment District No. 05-21 limited obligation improvement bonds, adjustable rate bonds series A (the bonds). The Outlook for the long-term rating is Stable.

The rating action is in connection with: (i) the substitution of the irrevocable direct-pay letter of credit (LOC) which is currently provided on a several basis by U.S. Bank National Association (U.S. Bank, rated 'AA-/F1+'; Stable Outlook by Fitch) and California State Teachers' Retirement System (rated 'AA+/F1+'; Stable Outlook) with a substitute LOC to be issued solely by U.S. Bank, and (ii) the mandatory tender of the bonds, which will occur on May 1, 2014.

KEY RATING DRIVERS

The rating is based on the support provided by the substitute LOC issued by U.S. Bank.

Pursuant to the U.S. Bank substitute LOC, the bank is obligated to make regularly scheduled payments of principal of and interest on the bonds in addition to payments due upon maturity, acceleration and redemption, as well as purchase price for tendered bonds. The rating will expire upon the earliest of: (a) May 1, 2017, the initial stated expiration date of the U.S. Bank substitute LOC, unless such date is extended; (b) conversion to a mode other than a daily, weekly or monthly rate mode; (c) any prior termination of the substitute LOC; and (d) defeasance of the bonds. The U.S. Bank substitute LOC provides full and sufficient coverage of principal plus an amount equal to 58 days of interest at a maximum rate of 12 % based on a year of 365 days and purchase price for tendered bonds, while in the weekly rate mode. The Remarketing Agent for the bonds is Merrill Lynch, Pierce, Fenner & Smith Incorporated.

RATING SENSITIVITIES

The rating is exclusively tied to the short and long-term rating that Fitch maintains on the bank providing the substitute 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. 4, 2014);

--'Rating Guidelines for Letter of Credit-Supported Bonds' (June 14, 2013).

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 Letter of Credit-Supported Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=710476

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