2008-10-10 22:21:00 -

- In the course of routine surveillance, Fitch Ratings has affirmed at 'A+' the following qualified zone academy (QZAB) bonds for the Aurora West School District No. 129, Illinois (the district):

--$2 million lease certificates, series 2001;

--$1 million lease certificates, series 2003.

The Rating Outlook is Stable.

The rating reflects strength of the district's general

obligation pledge as well as the pledge of state aid revenues and the withholding mechanism applied for the benefit of bondholders. The certificates are payable from general funds of the district and other legally available funds. The district does not have the authority to levy additional taxes in meeting its lease obligations. District finances are satisfactory, aided by a recent voter approved millage increase as well as the maintenance of a sizable working cash fund. Break-even results are projected for the close of fiscal 2008, with a small drawdown planned for fiscal 2009. Some economic softening in the area is noted, as reflected in the recent spike in the county's monthly unemployment rate. The economic downturn could have an impact on financial operations. Debt ratios are moderate, with no additional borrowing planned.

As additional security, the district has adopted state aid intercept proceedings under the Illinois School Code and the Local Government Debt Reform Act. In these proceedings, the district directs the Illinois State Superintendent of Education, the State Treasurer and the State Comptroller to pay general state aid directly to the registrar (trustee), commencing twelve months before bond maturity. Withholding of these dedicated revenues continues until all revenues have been received. Once the registrar receives the full amount of the dedicated revenues or receives other funds from the district sufficient to pay bond principal, the registrar will notify state officials in writing to stop the withholding process.

Under the Debt Reform Act, the district treasurer acts as the lessor to undertake specified improvements in the district; and the district leases such improvements as lessee and make lease payments. The district has covenanted to budget its funds annually and to make timely payments of the lease certificates. The lease is not subject to appropriation since bondholders may pursue any available remedy for specific performance of the district's agreement to budget funds and make timely payment.

Note: Fitch issued an exposure draft on July 31, 2008 proposing a recalibration of tax-supported and water/sewer revenue bond ratings which, if adopted, may result in an upward revision of this rating (see Fitch research 'Exposure Draft: Reassessment of the Municipal Ratings Framework'.) At this time, Fitch is deferring its final determination on municipal recalibration. Fitch will continue to monitor market and credit conditions, and plans to revisit the recalibration in first quarter-2009.

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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