2011-03-14 21:19:50 -

Fitch Ratings has placed the following Texas Southmost College District (TSC) ratings on Rating Watch Negative.

--$60 million limited tax bonds 'AA';

--$13.3 million maintenance tax notes 'AA'.

RATING RATIONALE.

--The ratings are placed on Negative Watch in response to the recent dissolution of the unique, long-standing partnership which has been in place since 1991 between the University of Texas at Brownsville and Texas Southmost College.

--Fitch has previously noted that this long-term partnership positioned TSC well in meeting its ongoing operational and financial challenges; therefore, its dissolution creates inherent uncertainty in the district's credit profile.

WHAT COULD TRIGGER A DOWNGRADE?


--Evidence of growing pressure on operations such as rising cost

drivers and/or tax rate, declining enrollment trends, or a rocky, delayed transition process.

SECURITY.

The maintenance tax notes are secured by an operating ad valorem tax levied on all taxable property within the district, limited to up to $0.35 per $100 taxable assessed valuation (TAV). The security of the limited tax bonds is an ad valorem tax levied on all taxable property within the district, limited to up to $0.50 per $100 TAV. The district's total tax rate cannot exceed $0.85 per $100 TAV.

Additional information is available at ' www.fitchratings.com : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. '.

Applicable Criteria and Related Research.

--'Tax-Supported Rating Criteria', (Aug. 16, 2010);

--'U.S. Local Government Tax Supported Rating Criteria', (Oct. 8, 2010).

Applicable Criteria and Related Research.

Tax-Supported Rating Criteria

www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id= .. : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..

U.S. Local Government Tax-Supported Rating Criteria

www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id= .. : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..

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Fitch RatingsPrimary AnalystRebecca C. Moses, +1-512-215-3739Associate
DirectorFitch, Inc.111 Congress AvenueAustin, TX 78701orSecondary

AnalystJose Acosta, +1-512-215-3726Senior DirectororCommittee
ChairpersonAmy Laskey, +1-212-908-0568Managing DirectororMedia
Relations:Cindy Stoller, +1-212-908-0526Email: cindy.stoller@fitchratings.com : mailto:cindy.stoller@fitchratings.com