Fitch Ratings affirms the ratings assigned to the following prime and
government money market funds managed by US Bancorp Asset Management
(UBAM), a wholly-owned indirect subsidiary of U.S. Bank, N.A. (NYSE:
USB):
--First American Prime Obligations Fund at 'AAAmmf';
--First American Treasury Obligations Fund at 'AAAmmf';
--First American US Treasury Money Market Fund at 'AAAmmf'.
KEY RATING DRIVERS
The main drivers for the affirmations are:
--The portfolios' overall credit quality and diversification;
--Low exposure to interest rate and spread risks;
--Short maturity profile with high overnight and one-week liquidity,
consistent with funds' shareholders profile and concentration;
--The capabilities and resources of UBAM as investment advisor.
As of June 13, 2013, First American Prime Obligations Fund, First
American Treasury Obligations Fund and First American US Treasury Money
Market Fund had approximately $9.9 billion, $8.3 billion and $832
million in assets under management, respectively.
PORTFOLIO CREDIT QUALITY/DIVERSIFICATION
Consistent with Fitch's 'AAAmmf' rating criteria, all three funds
maintain a high credit quality by investing exclusively in securities
rated at least 'A/F1' or equivalent and seek to mitigate counterparty
risk arising from investments in repurchase agreements by transacting
with counterparties rated at least 'A/F1' or equivalent.
First American Prime Obligations Fund has the ability to enter into
overnight and term repurchase agreements backed by a variety of
collateral. First American Treasury Obligations Fund has the ability to
enter into overnight and term repurchase agreements backed by U.S.
treasury securities. In line with the funds' investment policies, the
value of collateral exceeds the value of the repurchase agreements by a
specified overcollateralization rate that is consistent with the
assigned ratings.
Additionally, the funds seek to manage concentration with respect to
both direct and indirect exposure to an issuer and are in line with
Fitch's issuer diversification guidelines.
In evaluating the credit and market risk of prime money market fund
assets, Fitch utilizes the Portfolio Credit Factor (PCF), which is a
risk-weighted measure of portfolio assets accounting for credit quality
and maturity profiles. As of June 13, 2013, First American Prime
Obligations Fund maintained a PCF consistent with Fitch's 'AAAmmf'
rating criteria of 1.50 or less.
MATURITY PROFILE
The funds seek to minimize interest rate and spread risks by limiting
their weighted average maturities (WAM) and weighted average life (WAL)
to 60 days and 120 days, respectively, consistent with Fitch's 'AAAmmf'
rating criteria. As of June 13, 2013, First American Prime Obligations
Fund had WAM of 48 days and WAL of 91 days, First American Treasury
Obligations Fund had WAM of 54 days and WAL of 54 days and First
American US Treasury Money Market Fund had WAM of 46 days and WAL of 46
days.
LIQUIDITY PROFILE
To limit liquidity risk, the funds seek to invest at least 10% of their
portfolios in daily liquid assets and at least 30% of their portfolios
in weekly liquid assets. As of June 13, 2013, the funds met the 'AAAmmf'
liquidity guidelines outlined in Fitch's rating criteria for money
market funds.
FUND OBJECTIVES
First American Treasury Obligations Fund seeks to provide maximum
current income and daily liquidity by purchasing high-quality short-term
debt securities such as commercial paper, repurchase agreements,
variable rate demand notes, and bank instruments.
First American Treasury Obligations Fund seeks to provide maximum
current income and daily liquidity by purchasing U.S. Treasury
securities and highly liquid repurchase agreements collateralized at
more than 100%.
First American US Treasury Money Market Fund seeks to provide maximum
current income and daily liquidity by purchasing U.S. Treasury and other
money market funds that invest exclusively in such obligations.
INVESTMENT ADVISER
UBAM is a wholly-owned subsidiary of U.S. Bank, N.A. (rated 'AA-'/'F1+'
by Fitch). Fitch views USB's and UBAM's investment advisory
capabilities, financial and resource commitments, operational controls,
corporate governance, and compliance procedures as consistent with the
'AAAmmf' rating assigned to the fund. As of March 28, 2013, UBAM had
approximately $53 billion in assets under management.
RATING SENSITIVITY AND SURVEILLANCE
The ratings may be sensitive to material changes in the credit quality
or market risk profiles of the funds. A material adverse deviation from
Fitch's guidelines for any key rating driver could cause Fitch to
downgrade the ratings. For additional information about Fitch's money
market fund ratings guidelines, please review the criteria referenced
below.
To maintain the fund ratings, Fitch seeks weekly portfolio holdings
information from the fund administrator and conducts surveillance checks
against its ratings guidelines. Surveillance data for these funds is
available at www.fitchratings.com/FAM
then Surveillance.
Additional information is available at 'www.fitchratings.com'.
The sources of information used to assess this rating were the public
domain and UBAM.
Applicable Criteria and Related Research:
--'Global Money Market Fund Rating Criteria', March 26, 2013.
Applicable Criteria and Related Research:
Global Money Market Fund Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=704145
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=795046
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DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING
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IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE
AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'.
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CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH
WEBSITE.
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