Fitch to Confirm S-T 'F1+' Rating & Upgrade L-T Rating to 'AAA' for DASNY Revs Ser 03D-2E & 03D-2H

NEW YORK--(Business Wire)--
On the effective date of July 13, 2009, Fitch Ratings will confirm the
short-term 'F1+' rating and upgrade the long-term rating to 'AAA' from 'A+' for
the currently outstanding Dormitory Authority of the State of New York (DASNY),
mental health services facilities improvement revenue bonds, $99,700,000
subseries 2003D-2E bonds and $50,000,000 subseries 2003D-2H bonds. The rating
actions will be taken in connection with the mandatory tender and remarketing of
the bonds upon substitution of the liquidity support for the bonds scheduled to
occur on July 13, 2009.

The long-term rating has reflected the long-term rating assigned to the mental
health services facilities improvement revenue bonds issued by DASNY. The
short-term 'F1+' rating has been based on the liquidity support provided by BNP
Paribas, acting through its San Francisco Branch with respect to the subseries
2003D-2E bonds and HSBC Bank USA, acting through its New York Branch, with
respect to the subseries 2003D-2H bonds, in each case in the form of a standby
bond purchase agreement.

The long-term 'AAA' rating to be assigned to the bonds will be based jointly on
the underlying rating assigned to the bonds (currently rated 'A+' with a Stable
Outlook by Fitch), and the support to be provided by two separate letters of
credit (LOCs), to be issued by the Royal Bank of Canada (bank) each securing a
respective series of the bonds. The bank is rated 'AA/F1+' with a Stable Outlook
by Fitch. The short-term 'F1+' rating will be based solely on the LOCs.

The long-term rating will be based on Fitch's dual-party pay methodology which
considers the likelihood of the failure of both a rated obligor and a bank LOC
provider. The methodology results in a rating that is up to two notches higher
than the stronger of the two credits if the following conditions are met: (1)
both entities have a rating of 'A' or higher; (2) the transaction is structured
such that payments from both the municipal issuer and the bank are in the flow
of funds and both entities would have to fail to perform before the bonds
defaulted; and (3) the credit of the bank and the rated obligor have no more
than a medium degree of correlation. In this instance, Fitch has determined a
low degree of correlation, which results in a rating of 'AAA/F1+' for the bonds.
If either the underlying rating assigned to the bonds or the bank were
downgraded to 'A-' or lower, this methodology could no longer be applied, and
the long-term rating for the bonds would then be adjusted to the higher of the
bank rating and the underlying bond rating.

The LOCs will provide full and sufficient coverage of principal plus an amount
equal to 46 days' interest at a maximum rate of 12% based on a year of 365 days
and purchase price for tendered bonds, while in the weekly rate mode. The
ratings will expire upon the earliest of: (i) July 12, 2010, the initial stated
expiration date of the LOCs, unless such date is extended; (ii) any prior
termination of the LOCs; or (iii) defeasance of the bonds. The remarketing agent
for the bonds is RBC Capital Markets Corporation.

The bonds bear interest at the weekly rate, but may be converted to a daily,
flexible, auction, term or fixed rate mode. While bonds bear interest in the
weekly rate mode, interest is payable on the first business day of each month.
During the weekly rate mode, holders have the option to tender their bonds on
any business day, following the required prior notice to the tender agent. The
bonds are subject to mandatory tender: (1) during the flexible or long-term rate
modes, on business day after the last day of each rate period; (2) the date of
the conversion of the interest rate on the bonds, (3) on the second business day
preceding the expiration of the credit or liquidity facility; (4) on the fifth
day preceding the termination of the credit or liquidity facility; (5) on the
fifth day following trustee's receipt of notice from the bank that it will not
reinstate the interest component of the LOC and, (6) the substitution date of
the credit for liquidity facility. Optional and mandatory redemption provisions
also apply to the bonds pursuant to the terms of the authorizing documents.

The bonds were originally issued on July 15, 2003 as two of nine subseries of
DASNY's mental health services facilities improvement revenue bonds, series
2003D-2. The proceeds of the series 2003D-2 bonds were used to refund certain
bonds previously issued by DASNY and the New York State Medical Care Facilities
Finance Agency.

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
Ronald P. McGovern, +1-212-908-0513
Media Relations:
Cindy Stoller, +1-212-908-0526
cindy.stoller@fitchratings.com

Copyright Business Wire 2009