The rating applies to the system's $161.3 million for series2001B bonds and $88.3 million in series 2001C bonds. The New YorkCity-based rating firm also affirmed the AAA rating on the UTsystem's outstanding parity obligation bonds of $971.6 million ofbonds and $179 of commercial paper previously issued through UT'srevenue financing system debt program.

Money from the series 2001 B offering will refund $116 millionof outstanding RFS commercial paper, provide money for $45 millionfor capital projects and pay costs associated with the issuance.The series 2001C offering will go toward $88 million of capitalproject authorized by the Texas Legislature. The bonds are expectedto sell in early September.

In a prepared statement, Fitch said the rating is supported bythe system's strong balance sheet, positive operating performance,manageable debt burden and growing enrollment.The UT system boardof regents meeting last week in Arlington approved a $3.4-billion,six-year capital improvement program. The program consists of 154projects with $2.8 million in new construction and $577 million inrehabilitation and repair projects.

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