October 13, 2004
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FOR IMMEDIATE RELEASE

International Rating Agency Upgrades $1.42 Billion In Metro Proposition "C" Sales Tax Revenue Bonds To 'A+'

(Los Angeles) - The global credit rating firm Fitch Ratings has rated the Los Angeles County Metropolitan Transportation Authority's (Metro) $180 million Proposition C Sales Tax Revenue Bonds, Second Senior Bonds, Series 2004-A, "A+," and has upgraded to "A+" from "A" Metro's $1.22 billion in outstanding parity bonds.

In addition, Fitch has affirmed the "A+" rating on $1.58 billion in Proposition A First Tier Senior Bonds and the "A" rating on $11 million in Proposition A First Tier Second Senior Bonds. The rating outlook for all bonds is stable.

The upgrade of one notch from "A" to "A+," which is considered a high investment grade rating, will result in a lower interest rate and accordingly will reduce borrowing costs for Metro. The highest attainable rating is "AAA."

Fitch's announcement said the upgrade "reflects high debt service coverage resulting from the continued strong Proposition C sales tax performance" coupled with Metro's intent to not issue debt senior to the second senior bonds.

The announcement noted the ratings upgrade also reflects several improvements in Metro's administration and operations over the past several years including:

Increased operating efficiency as evidenced in costs per service hour while expanding bus and rail operations

Greater stability of Metro's management team, with several senior members in their positions for at least five years

Improved relationship with the Federal Transit Administration (FTA), resulting in a full funding grant agreement for the Eastside Light Rail project

The expiration of the 1996 Consent Decree's prohibition on fare increases, providing Metro with greater fare flexibility

Fitch Ratings cites managing labor costs and mandates of the Consent Decree as ongoing challenges for Metro.

Metro's $180 million Proposition C Sales Tax Revenue Bonds, Second Senior Bonds, Series 2004-A, and $1.22 billion in outstanding parity bonds have also been assigned ratings of "A1" by Moody's Investors Service and "A+" by Standard and Poor's.

METRO-175

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