2008-06-03 23:34:26 -

- Fitch Ratings has assigned a 'AAA/F1+' rating to the California Health Facilities Financing Authority revenue bonds (Stanford Hospital and Clinics) $48,800,000 2003 series B, $48,700,000 2003 series C, and $52,500,000 2003 series D, which are being converted from the current auction rate insured mode to a weekly variable rate mode.

The long-term 'AAA' rating assigned to the bonds

is based on the support provided by a municipal bond insurance policy issued by Financial Security Assurance Inc. The policy, which insures scheduled payments of principal and interest, extends to the maturity of the bonds, Nov. 15, 2036.

The short-term 'F1+' rating on the bonds is based on the liquidity support of three standby bond purchase agreements (SBPA) provided by Dexia Credit Local. The SBPAs provide for the payment of the principal component of purchase price and up to 35 days of interest calculated at a maximum rate of 12% per annum based on a year of 365 days. The SBPAs will expire on June 3, 2011 (2003 series B), June 10, 2011 (2003 series C), and June 17, 2011 (2003 series D), unless extended or earlier terminated pursuant to their terms. The remarketing agent for the 2003 series B and 2003 series D bonds is Morgan Stanley, and the remarketing agent for the 2003 series C bonds is Goldman Sachs & Co.

The bonds will be reoffered at a weekly interest rate on June 3, 2008 (2003 series B), June 10 (2003 series C), and June 17 (2003 series D). After the conversion dates the bonds may be converted to bear interest at the daily, flexible rate, fixed rate, or auction rate modes. While the bonds bear interest in the weekly rate mode, interest is payable on the first business day of each month, commencing July 1, 2008. Holders of bonds bearing interest at a daily or weekly rate mode may tender their bonds for purchase with prior notice. The SBPA covers bonds in the weekly rate mode only.

The bonds are subject to a mandatory tender upon conversion of the interest rate modes, upon the expiration or substitution of the SBPA, and upon the occurrence of certain events of default under the SBPA. The bonds are also subject to mandatory and optional redemption provisions.

The proceeds of the bonds were used to the cost of acquiring, constructing and equipping certain improvements to the hospital's facilities.

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.

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