Fitch Rates Colorado Springs, Colorado's $50MM VRD Utilities System Improvement Revs...

Fitch Rates Colorado Springs, Colorado's $50MM VRD Utilities System Improvement Revs 2008A 'AA/F1+'

NEW YORK--(Business Wire)--
Fitch assigns a rating of 'AA/F1+' to the $50,000,000 City of
Colorado Springs, Colorado (the city), variable rate demand (VRD)
utilities system improvement revenue bonds, series 2008A. The proceeds
of the bonds will be used to finance a number of general capital
improvements to the utilities system. In addition, Fitch affirms the
underlying rating of the city's $1.53 billion parity lien utilities
system revenue/refunding and system improvement revenue bonds at 'AA'.
The rating outlook is Stable.

The long-term 'AA' rating on the 2008A bonds is based on the net
revenue pledge of the city's combined utilities system, and reflects
the system's diverse revenue stream with four major business segments
(electric, natural gas, water and wastewater), competitive retail
sales, consistent financial performance, relatively low-cost power
supply mix, and diverse customer base.

The short-term 'F1+' rating on the 2008A bonds is based on the
standby bond purchase agreement (SBPA) provided by JPMorgan Chase
Bank, National Association. The SBPA provides for the payment of the
principal component of purchase price and an amount equal to 35 days
of interest calculated at a maximum rate of 12% per annum based on a
year of 365 days during the weekly, monthly and quarterly rate modes.
The SBPA will expire on Sept. 11, 2009, unless extended or earlier
terminated pursuant to its terms. The 'F1+' short-term rating will
expire upon the expiration or termination of the SBPA. Wells Fargo
Bank, N.A., as tender agent, is required to give notice to the bank in
the event that remarketing proceeds are insufficient to pay purchase
price for tendered bonds. Merrill Lynch, Pierce, Fenner & Smith
Incorporated is the remarketing agent for the 2008A bonds. The 2008A
bonds are expected to be available for delivery on or about Sept. 12,
2008.

The 2008A bonds will be issued in the weekly rate mode, but may be
converted to a monthly, quarterly, semiannual, annual, five-year,
auction or fixed rate of interest. While 2008A bonds bear interest in
the weekly, monthly and quarterly rate modes, interest is payable on
the first business day of each month, commencing Oct.1, 2008. Holders
of bonds bearing interest in a weekly, monthly or quarterly rate mode
may tender their bonds for purchase with prior notice as specified in
the bond ordinance. Series 2008A bonds are subject to mandatory tender
upon any conversion of the interest rate modes and upon expiration,
termination or substitution of the SBPA. The Series 2008A bonds are
also subject to mandatory sinking fund redemption and optional
redemption pursuant to the terms of the bond ordinance.

For more information on the long-term rating of the city's utility
system and the series 2008B and 2008C bonds to be offered in Oct.
2008, see the press release dated Aug. 21, 2008 on the Fitch Ratings
website at www.fitchratings.com.

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, New York
Mary Jane Ziga +1-212-908-0529 (for the bonds)
Lina Santoro, +1-212-908-0522 (for the city)
Cindy Stoller, +1-212-908-0526 (Media Relations)

Copyright Business Wire 2008