2008-07-23 22:53:04 -

- In conjunction with the downgrade of Wachovia Corporation's (Wachovia) Issuer Default Rating (IDR) and senior debt ratings to 'A+' from 'AA-', Fitch Ratings has downgraded 72 bonds backed by Wachovia letters of credit (LOCs).

Most of the downgrades are to 'A+' from 'AA-' reflecting the credit substitution of Wachovia, but certain bonds are downgraded to 'AA' from 'AA+',

considering the joint probability of the failure of both a rated municipal obligor and a bank LOC provider.

The two-party pay methodology results in a rating that is up to two notches higher than the stronger of the two credits if the following conditions are met: (1) both entities have a rating of 'A' or higher; (2) the transaction is structured such that payments from both the municipal issuer and the bank are in the flow of funds and both entities would have to fail to perform before the bonds defaulted; and (3) the credit of the bank and the rated obligor have no more than a medium degree of correlation. Where the correlation is considered low, the bonds are rated two notches higher than the stronger of the two entities, and where the correlation is considered medium, the bonds are rated one notch higher than the stronger of the two entities.

A spreadsheet detailing the rating actions in question is available on the Fitch Ratings web site at www.fitchratings.com under the following headers:

Public Finance -- U.S. Public Finance -- Special Reports

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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 Ratings
David Litvack, +1 212-908-0593 (New York)
Media Relations:
Sandro Scenga, +1-212-908-0278 (New York)