New York, November 13, 2012 --

Moody's Rating

Issue: Lease Revenue Bonds, Series 2012 (University of Alaska Fairbanks Student Dining Project); Rating: Aa3; Sale Amount: $23,835,000; Expected Sale Date: 11/27/2012; Rating Description: Lease Rental: Appropriation

Opinion

Moody's Investors Service has assigned a Aa3 long-term rating to the University of Alaska's$23.8 million Lease Revenue Bonds, Series 2012 (University of Alaska Fairbanks Student Dining Project). The bonds will be issued by Community Properties Alaska, Inc. (CPA), an Alaskan nonprofit single purpose corporation. At the same time we have affirmed the Aa2 rating on the university's outstanding general revenue bonds. The rating outlook is stable.

SUMMARY RATINGS RATIONALE

The Aa3 rating on University of Alaska's Lease Revenue Bonds, Series 2012 is one level lower than UA's Aa2 long-term rating and reflects the lease structure of the bonds and the subordinate claim on the university's broad general receipts pledge.

UA's Aa2 senior-most rating reflects its strong market position as Alaska's sole public higher education provider, continued favorable State operating and capital funding as well as a moderate debt burden relative to balance sheet and revenues. Offsetting challenges are material reliance on state appropriations to fund operations, weak state demographics and thin monthly liquidity supporting operations.

STRENGTHS

*Critical credit strength as sole public higher education provider for the state, with stable enrollment of 19,446 full-time equivalent (FTE) students for fall 2012, down slightly from the previous year but over 10% higher than fall 2008. Net tuition revenues continue to rise, with net tuition per student of $6,132 in FY 2012 up 22% since FY 2008.

*Continued strong university funding from State of Alaska (rated Aaa with a stable outlook), with regular increases in operating appropriations for fiscal years (FYs) 2008 through 2013, coupled with substantial funding for capital projects. The state also implemented or increased funding for financial aid programs to increase Alaskan high school graduates' college participation.

*Increasing research activity, with research expenditures rising to $222 million in FY 2012 from $188 million in FY 2011 and $158 million in FY 2010, with funding from a diverse group of sponsoring agencies.

*Growing financial resources providing a growing cushion against a relatively low debt burden, with $316 million of FY 2012 expendable financial resources cushioning $171 million of pro-forma debt (including the current issue) an ample 1.8 times.

*Lease structure with University of Alaska's lease payments due from its general revenues, although subordinated to debt service payments on its Aa2-rated general revenue bonds. Essentiality of project as the only dining facility on the Fairbanks campus, UA's research campus.

CHALLENGES

*Geographically remote and sparsely populated state, with a high reliance on Alaska residents for future enrollment, with projections of modest declines in the number of Alaskan high school graduates through 2018.

*Narrow operating cash flow, as calculated by Moody's, with a 7.1% operating cash flow margin for FY 2012, although up from weaker cash generation in earlier years.

*High reliance on state funding, representing 49% of FY 2012 operating revenues (including payments made on behalf of the University), with possible long-term pressures on State revenues as oil production, the primary source of revenues, declines.

*Weak balance sheet relative to other Aa2-rated major state institutions, with expendable resources of $316 million, below the Aa2 median of $654 million, and thin monthly liquidity at 71 days cash on hand significantly lower than the Aa2 median of 143 days.

OUTLOOK

University of Alaska's stable rating outlook assumes generally stable enrollment, continued favorable state operating support including for student scholarship support, sufficient cash flow generation to support debt service, and limited near-term borrowing plans.

WHAT COULD MAKE THE RATING GO UP

Substantial increase in financial resources in the face of limited debt growth, consistently strong state financial support, strengthened market position as highlighted by growth of net tuition revenue and maintenance or growth of research profile, sustained improvement in operating performance.

WHAT COULD MAKE THE RATING GO DOWN

For the Lease Revenue Bonds, failure to reach Substantial Completion of the project, resulting in a termination of the Facility Lease. For the General Revenue Bonds, sustained decreases in state support or downgrade of the State of Alaska's rating; substantial increase in debt; deterioration in operations producing significantly imbalanced operating performance; weakened student demand, reflected in declines in enrollment or inability to grow net tuition revenue.

PRINCIPAL RATING METHODOLOGY

The principal methodology used in this rating was Not-For-Profit Healthcare Rating Methodology published in March 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

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Diane F. Viacava VP - Senior Credit Officer Public Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Mary Kay Cooney AVP - Analyst Public Finance Group Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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