The rating on the District of Columbia's notes is based on an irrevocable direct-pay LOC issued by First Union National Bank. The LOC covers principal and interest on the notes and purchased price for tendered notes. The LOC expires Oct. 6, 1998 unless earlier terminated according to its terms. The notes are originally issued in an initial rate mode from the date of delivery through Sept. 30, 1997. Commencing Oct. 1, 1997, the notes will bear interest at a weekly rate. Holders may tender their notes on any business day with appropriate notice. The notes are subject to mandatory tender upon default under the LOC agreement. Note proceeds will be used to finance the district's projected operating deficit for fiscal
