Fitch Ratings assigns a long-term ''A'' rating to the approximately $32 million of State of Florida Board of Governors parking facility revenue bonds, series 2009A, issued on behalf of Florida International University (FIU). The bonds are scheduled to sell competitively the week of Oct. 26, 2009. At the same time, Fitch affirms the ''A'' rating on FIU''s approximately $25.4 million of outstanding parking facility revenue bonds. The Rating Outlook is Stable.

The series 2009A bonds rank on parity with FIU''s outstanding parking facility revenue bonds and are secured by the pledged net revenues of FIU''s integral and self-supporting parking system. Proceeds of the series 2009A bonds will be used to construct a multi-level parking garage that will add 1,750 net new parking spaces, fund a debt service reserve fund, and pay costs of issuance.

The ''A'' rating on the parking system bonds is supported by the strength of the revenues pledged, which include a mandatory student transportation fee; strong operating performance, and solid debt service coverage generated by the parking system. It is also supported by the stable, albeit moderating, enrollment growth at FIU, which continues to support demand for parking facilities. Primary credit concerns include the parking system''s high debt burden and ongoing capital needs; and the financial impact of recent state funding reductions on FIU''s overall finances. Should FIU successfully manage the implementation of the project while at the same time maintain the parking system''s strong operating performance and debt service coverage, upward rating movement is possible.

Parking system revenue sources include a mandatory transportation access fee collected from each student at FIU''s main Miami campus (currently $77 per semester); parking decal sales; visitor parking; and traffic and towing fines. For fiscal 2009, pledged revenues totaled $6.5 million and resulted in a healthy 2.16 times (x) debt service coverage ratio. However, the parking system''s debt burden remains very high, with maximum annual debt service (MADs) of approximately $5.2 million representing 49.3% of fiscal 2009 operating revenues. For fiscal 2010, FIU projects the parking system''s MADS coverage to be 1.3x, based on pledged revenues of $6.8 million.

The parking system''s operating margin has been very strong historically and averaged 32.5% over the past five fiscal years. For fiscal 2009, the operating margin was 24.4%, reflective of gross revenues of $10.6 million and net operating income of $2.6 million. While still strong, the operating margin declined from 36.5% in fiscal 2008 as a result of the parking system taking on additional maintenance services on its facilities and costs associated with the upcoming parking garage project.

The parking system''s available funds, defined by Fitch as unrestricted and temporarily restricted cash and investments, totaled $12.9 million as of June 30, 2009, and covered operating expenses ($8 million) by a solid 160%. However, subsequent to issuance of the series 2009A bonds, available funds as a percentage of pro forma debt (approximately $57.4 million) will decline to a low 22.5%. Besides the series 2009A project, FIU has no additional capital projects or debt plans for the parking system over the near to intermediate term.

Enrollment growth at FIU has made the parking system essential to its ability to provide for the ongoing needs of its students. Fall 2009 headcount enrollment was 39,751, up 1.5% from fall 2008, and up 6.2% since fall 2005. The majority of students are located at FIU''s main campus in Miami. FIU is one of 11 institutions of public higher education in the State University System of Florida (currently rated ''AA'' by Fitch).

Additional information is available at ''www.fitchratings.com''.

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