Fitch to Confirm A/F1' Rating on Los Angeles IDA VRDBs (KH Enterprises, LLC), Series 2008

On the effective date of Jan. 17, 2014, Fitch Ratings will confirm the 'A/F1', Stable Outlook rating assigned to the $1,755,000 ($1,455,000 currently outstanding) City of Los Angeles Industrial Development Authority variable rate demand industrial development revenue bonds (KH Enterprises, LLC Project), series 2008. The rating action is in connection with the (i) substitution of the irrevocable direct-pay letter of credit (LOC) previously provided by Comerica Bank (rated 'A/F1', Stable Outlook) with a substitute LOC issued by Bank of the West (rated 'A/F1', Stable Outlook) and (ii) mandatory tender of the bonds on Jan. 17, 2014.

KEY RATING DRIVERS:

The rating is based on the support provided by the substitute LOC issued by Bank of the West.

Pursuant to the substitute LOC, the bank is obligated to make regularly scheduled payments of principal of and interest on the bonds in addition to payments due upon maturity, acceleration and redemption, as well as purchase price for tendered bonds. The ratings will expire upon the earliest of: (a) Jan. 16, 2021, the initial stated expiration date of the substitute LOC, unless such date is extended; (b) conversion to the fixed interest rate mode; (c) any prior termination of the substitute LOC; and (d) defeasance of the bonds. The substitute LOC provides full and sufficient coverage of principal plus an amount equal to 45 days of 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. A mandatory tender of the bonds will occur on the substitution date on Jan. 17, 2014. The Remarketing Agent for the bonds is First Southwest Company.

RATING SENSITIVITIES:

The rating is exclusively tied to the short- and long-term rating that Fitch maintains on the bank providing the substitute LOC and will reflect all changes to that rating.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Criteria', Feb. 27, 2013;

--'Rating Guidelines for Letter of Credit-Supported Bonds', June 14, 2013.

Applicable Criteria and Related Research:

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701570

Rating Guidelines for Letter of Credit-Supported Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=710476

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Fitch Ratings
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Mario Civico
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