Fitch Rates University of Texas System's $100MM 2009B RFS Bonds 'AAA'

NEW YORK--(Business Wire)--
Fitch rates approximately $100,000,000 of the Board of Regents of The University
of Texas System's (the system's) Revenue Financing System (RFS) bonds, series
2009B 'AAA'. The bonds, which will be issued in a traditional fixed rate mode,
are expected to price via negotiated sale on or about Jan. 22, 2009. Proceeds
will be applied by the system to pay the purchase price of outstanding RFS debt
tendered under the system's recently authorized tender program. As market
conditions create an economic incentive to do so, the system will issue the
series 2009B bonds, and move forward with the tender offer.

Fitch also affirms the system's debt ratings as follows:

--Approximately $2.6 billion of outstanding RFS fixed-rate bonds at 'AAA';

--Approximately $1.0 billion of outstanding RFS variable-rate demand bonds
(VRDBs) at 'AAA/F1+';

--$1.25 billion RFS commercial paper (CP) program, series A (tax-exempt) and
series B (taxable) at 'F1+' (approximately $780.7 million of CP series A notes
are currently outstanding).

The Rating Outlook is Stable.

RFS debt is secured by a lien on and pledge of all legally available revenues,
funds and balances of the system's 15 member institutions, including tuition and
auxiliary receipts but excluding state appropriations, higher education
assistance fund (HEAF) payments, restricted gifts, and certain faculty practice
plan revenues. For the fiscal year ended, pledged revenues totaled $5.9 billion.

The 'AAA' rating is supported by the system's diversified revenues, consistently
strong financial performance, manageable debt burden, and experienced management
team. Material credit risks remain minimal. While the system's fall 2008
enrollment (195,642 students) grew at only a modest rate (.7%) from the prior
fall semester, tuition and fee revenue generated by enrollment represents only
11% of its total revenues. The four main funding sources for the system are
healthcare operations (33% of total revenues, including professional fees
associated with faculty practice plans); sponsored programs, largely funded by
the federal government (20%); state appropriations (16%); and investment income
(14%). The breadth and diversity of various funding sources was viewed as a
positive in the rating process. The system's available funds, including cash and
investments not restricted, increased to $7.1 billion as of Aug. 31, 2008,
representing 63.6% of fiscal 2008 expenditures and 161.8% of outstanding RFS
bonds and CP notes.

The 'F1+' rating is based on the system's financial resources available to cover
maximum liquidity demands. As of Nov. 30, 2008, the system identified
approximately $7.8 billion of highly liquid funds (excluding bond proceeds),
available within a week or less, including $1.8 billion of daily liquidity,
which could be used to support variable-rate debt, including borrowings under
the RFS and Permanent University Fund (PUF) bond programs. Assuming maximum
draws under the RFS ($1.25 billion) and PUF ($500 million) CP programs, and
including $1.4 billion in outstanding RFS and PUF variable-rate demand bonds,
highly liquid funds would provide approximately 3.2 times (x) coverage of the
system's maximum weekly liquidity needs. It is recognized that UTIMCO holds
additional liquid assets, on behalf of the system, to support its variable-rate
programs. However, the conversion of these instruments to cash would not likely
be immediate. Fitch also notes that the system has historically rarely drawn CP
to its maximum authorized amount under either the RFS or PUF program and limits
maximum daily rollover of CP to $50 million per dealer.

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
Douglas J. Kilcommons, +1-212-908-0740 (New York)
Media Relations:
Cindy Stoller, +1-212-908-0526 (New York)
cindy.stoller@fitchratings.com

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