CalSTRS expanded its credit enhancement program to include transactions nationwide, said Sherry Reser, spokeswoman. The program had only taken account transactions within California, Oregon and Nevada. As a result, the $133 billion California State Teachers' Retirement System, Sacramento, will gain more fee revenue, Christopher Ailman, CIO, said in a news release. Fee income from the credit enhancement program totaled $5.8 million as of March 2005, up from $2 million in January 2000, Ms. Reser said. She declined to comment on future revenue expectations.
The program enables municipal debt issuers to substitute their lower credit rating for CalSTRS' higher credit rating through a letter of credit, line of credit or liquidity enhancement. It gives municipal agencies access to the capital markets and a lower interest rate on their debt. CalSTRS loans its credit rating to municipalities, local government entities, service districts, non-profit organizations and state agencies.