The rating on District of Columbia's bonds is based on an irrevocable direct pay LOC from Nationsbank, N.A. The LOC covers principal plus 35 days' interest at a maximum rate of 12% for the bonds. The LOC expires on Aug. 15, 2004 unless extended or earlier terminated according to its terms. Initial bond proceeds will be loaned to the American Council on Education to finance capital projects. The indenture permits issuance of additional parity bonds outstanding at any time with the delivery of an amendment or supplement to the LOC. Proceeds of additional bonds will be loaned to other qualifying nonprofit institutions to finance or refinance authorized capital projects. Before issuing additional bonds for additional borrowers, the trustee, Norwest Bank
