Fitch Rts $160MM WI Hlth & ED Fac Auth (Aurora Hlth Care) 2008 VRDBs 'AA+/F1+'

Fitch Ratings assigns a rating of 'AA+/F1+' to the $160,000,000 Wisconsin Health and Educational Facilities Authority variable rate revenue bonds (Aurora Health Care) consisting of: $80,000,000 series 2008A and $80,000,000 series 2008B. Concurrently, Fitch assigns 'A' underlying ratings to the series 2008A&B bonds and affirms the outstanding underlying and long term ratings on Aurora Health Care bonds at 'A'.

The Outlook is Stable.

(For further information on the long term ratings on Aurora Health Care, please see Fitch's rating action commentary dated July 23, at fitchratings.com, the ratings firm noted.)

The rating is based on the two irrevocable, direct-pay letters of credit (LOCs) provided by U.S. Bank National Association (the bank; currently Fitch rated at 'AA-/F1+') each supporting a respective series of bonds and the application of Fitch's joint probability methodology. The long-term 'AA+' rating assigned to the bonds is based jointly on the underlying rating assigned to the Aurora Health Care series 2008A and 2008B bonds (the bonds), and the support provided by LOCs issued by the bank (securing the bonds). The short-term 'F1+' rating is based solely on the LOCs.

The long-term 'AA+' rating is based on Fitch's methodology which considers the joint probability of the failure of both a rated obligor and the bank providing LOC support. The methodology results in a rating that is up to two notches higher than the higher of the two credits (the bank and the bonds) 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 obligor 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 that there is a low degree of correlation which results in a long-term rating of 'AA+'. If the bank or the Aurora Healthcare series 2008A and 2008B bonds were downgraded to 'A-' or lower, the joint probability could no longer be applied and the long-term rating would then reflect the higher of the bank rating and the underlying bond rating. The bank is obligated to make payments of principal of and interest on the bonds upon maturity and redemption, as well as the purchase price for tendered bonds. The LOCs provide full coverage of principal, interest equal to 198 days calculated at a maximum rate of 10 percent based on a year of 365 days, and purchase price for tendered bonds while the bonds are in a daily, weekly, or unit pricing mode. The rating for a series will expire upon the earliest of: the said expiration date of a series LOC, Nov. 14, 2011; any prior termination of a series LOC; and defeasance of the bonds.

The Series 2008A bonds will initially bear interest in the unit pricing rate mode for a period of time to be determined at pricing. The Series 2008B bonds will initially bear interest in a unit pricing mode of 365 days, ending on Nov. 14, 2009. Each series of bonds may be converted to a daily, weekly, R-Floats, term, indexed, stepped coupon, auction, or fixed interest rate mode. While bonds bear interest in the unit pricing mode of less than 180 days, interest is payable at the end of each period and while in a unit pricing period of greater than 181 days, interest is paid on the first business day to occur six calendar months following the date in which the change in mode occurs. The initial interest payment date for the Series 2008A will be determined at pricing and the initial interest payment date for the Series 2008B bonds will be May 14, 2009. During the daily or weekly rate modes bondholders may tender their bonds for purchase on any business day with the required notice delivered to the trustee. The bonds are subject to mandatory tender on (i) any mode change date, (ii) the second business day preceding the expiration or termination date of the series LOC, (iii) the series LOC substitution date, (iv) the business day following the trustee's receipt of notice from the bank of non-reinstatement of the interest component of the series LOC following an interest drawing, and (v) the business day following the trustee's receipt of notice from the bank of an event of default under the reimbursement agreement. Optional redemption provisions also apply to the bonds.

The remarketing agent for the Series 2008A bonds is Merrill Lynch & Co. The remarketing agent for the Series 2008B bonds is Goldman, Sachs & Co. The bonds are expected to be delivered on or about Nov. 14.

Bond proceeds will be used to construct, renovate and equip certain health care facilities of Aurora Health Care

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, fitchratings.com.