Fitch Takes Various Actions on Guam Economic Development & Commerce Authority, Series 2007

NEW YORK--(Business Wire)--
Fitch Ratings affirms two and downgrades one class from Guam Economic
Development and Commerce Authority, Tobacco Settlement asset-backed bonds,
series 2007, as follows:

--$17,505,000 series 2007A current interest turbo term bonds due June 1, 2032
affirmed at 'BBB+'; Outlook Stable;

--$16,070,000 series 2007A current interest turbo term bonds due June 1, 2047
affirmed at 'BBB+'; Outlook Negative;

--$3,407,077 series 2007B capital appreciation turbo term bonds June 1, 2057
downgraded to 'BB+' from 'BBB-'; Outlook Negative.

The various actions are based on the level of stress each class is able to
withstand as indicated by Fitch's new breakeven cash flow model. The model
indicates, for each class of bonds, the level of the annual Master Settlement
Agreement (MSA) payment percent change the trust would be able to sustain and
still pay the bond in full by the legal final date. The base case 'B'
corresponds to a 1% increase in the MSA payment received by the trust every
year. The 'BBB' category corresponds to an annual MSA payment decline of 1.25%.
The cash flow model accounts for the amount of the latest reported MSA payment
that the transaction has received, the capital structure, the reserve account,
and the bonds' legal final dates.

The bond payments are also tied to the tobacco companies making MSA payments.
Tobacco settlement bonds can be rated up to 'BBB+' based on Fitch's view of the
whole tobacco industry and the executory nature of the MSA. In the event of a
bankruptcy of a tobacco company, Fitch believes there is an incentive for the
company to continue to make payments under the MSA.

The 2007A bond due in 2032 is being affirmed at 'BBB+' with a Stable Outlook
which is consistent with the model output. The 2007A bond due in 2047 is being
affirmed at 'BBB+' and the 2007B bond is being downgraded to 'BB+'. Fitch has
assigned a Negative Outlook to both bonds as the breakeven levels are indicative
of lower ratings and the bonds may be downgraded depending on the amount of the
future MSA payments received by the trust.

Guam Economic Development and Commerce Authority, Tobacco Settlement
asset-backed bonds, series 2007 bonds are secured by the pledged payments made
under the MSA. The pledged payments consist of Guam's share of perpetual annual
payments and strategic contribution payments by the original participating
manufacturers (OPMs) and subsequent participating manufacturers (SPMs). The OPMs
at the time of the original agreement were Philip Morris USA, Inc.; R.J.
Reynolds Tobacco Company; Brown & Williamson Tobacco Corporation; and Lorillard
Tobacco Company. The amount of annual MSA payments received by the trust are
mainly affected by the tobacco consumption level and inflation rate, as well as
state specific adjustments, as specified in the MSA.

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
Aoto Kenmochi, +1-212-908-0867
Cynthia Ullrich, +1-212-908-0609
Stefanie Leung, +1-212-980-0826
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

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