OREANDA-NEWS. Fitch Ratings has reviewed and affirmed the ratings assigned to Medium-Term Notes series and Short-Term Notes series issued by 11 Puerto Rico closed-end funds (CEFs) advised by Santander Asset Management (Puerto Rico). A complete list of rating actions can be found at the end of this release.

These rating affirmations are based on currently outstanding criteria, published Sept. 4, 2014.

On July 30, 2015, Fitch published an exposure draft indicating minor changes to the rating criteria applicable to the ratings assigned to the notes issued by Puerto Rican closed-end funds. A proposed change that impacts the funds as the collateral accounts are currently constituted is a decrease in exposure to state-level GOs rated below investment grade. However, based on structural protections and the dynamic way the funds manage these leverage programs, Fitch does not anticipate negative rating impact as a result of this change. The affirmations also reflect the funds' ability to keep asset coverage in line with the assigned ratings through decreasing leverage and diversifying portfolios following recent negative price performance of Puerto Rican debt.

KEY RATING DRIVERS

The main drivers for the rating actions are:
--The asset coverage available to each series of notes at the individual, sub-account level;
--The structural protections afforded by mandatory collateral maintenance provisions in the event of asset coverage declines;
--The legal and regulatory parameters that govern the funds' operations;
--The capabilities of Santander Asset Management (Puerto Rico) as investment adviser.

FUND SUMMARY
The funds are corporations organized under the laws of the Commonwealth of Puerto Rico, and are duly registered as non-diversified, closed-end management investment companies under the Puerto Rico Investment Companies Act, as amended.

The funds normally invest at least 67% of total assets in securities issued by Puerto Rico entities. These include securities issued by the Commonwealth of Puerto Rico, Puerto Rico mortgage-backed and asset-backed securities, corporate obligations and preferred stock of Puerto Rico entities.

The funds increase amounts available for investment through the issuance of debt securities, or other forms of leverage, representing not more than 50% of total assets immediately after any such issuance. Currently, the funds use short-term and medium-term note facilities, as well reverse repurchase agreements, although not all facilities are utilized at all times.

STRUCTURAL PROTECTIONS
At the time of the ratings, the funds' asset coverage ratios, as calculated in accordance with the Fitch overcollateralization (OC) tests using the asset specific discount factors and the minimum discount factors found in the rating guidelines outlined in Fitch's applicable criteria, were in excess of 100%, which are the minimum asset coverage amounts deemed consistent with the assigned ratings.

Each fund segregates collateral for medium-term note series and short-term note series separately. The Fitch OC tests calculate asset coverage available to the notes based on the discounted market price loss expectations and diversification of the assets in each segregated collateral account. Should any such asset coverage tests decline below 100% (as tested weekly) and not be cured within the pre-specified timeframe of five business days, the governing documents would require the collateral agent to reduce leverage in a sufficient amount to restore compliance with the applicable asset coverage tests on the final day of the cure period.

THE ADVISOR
Santander Asset Management, LLC (SAM Puerto Rico or SAM PR) is the funds' investment advisor and, subject to the supervision of the funds' board of directors, is responsible for the overall investment strategy and implementation. SAM PR is a wholly-owned subsidiary of SAM Investment Holdings Limited (Jersey) (SAM Holdings Jersey), a privately held company organized under the laws of Jersey, United Kingdom, also referred to as SAM Global. SAM Global is owned in part (50%) by SAM UK Investment Holdings Limited, which is owned directly and indirectly by Banco Santander S.A., a public company traded on the New York Stock Exchange. SAM Global is also owned in part (50%) by Sherbrooke Acquisition Corp SPC, a segregated portfolio company incorporated in the Cayman Islands, controlled jointly by Warburg Pincus, LLC and General Atlantic, LLC. SAM PR is a part of SAM Global, which is composed of 11 asset management firms operating in 12 countries and had over EUR172 billion in assets under management as of March 31, 2015. As of June 30, 2015, SAM PR managed approximately $2 billion in assets.

RATING SENSITIVITIES

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 guidelines for any key rating driver could cause the ratings to be lowered by Fitch. Changes in the supply-demand dynamics with respect to invested collateral types may influence Fitch's analytical approach to the liquidity of underlying collateral types. In addition, the amount of leverage assumed by the fund could also influence Fitch's analytical conclusion if such leverage increased the likelihood of a bankruptcy stay with respect to the overall fund.

The ratings may be sensitive to material changes in the criteria applied to evaluate closed-end fund leverage. An exposure draft titled 'Rating Closed-End Fund Debt and Preferred Stock' (July 30, 2015), available at 'www.fitchratings.com', details proposed changes to the ratings criteria that may adversely affect the ratings described above. Fitch anticipates releasing updated rating methodology shortly after the conclusion of the exposure draft feedback period, at which time the current ratings will be re-evaluated using the new criteria.

For additional information about Fitch rating guidelines applicable to debt and preferred stock issued by closed-end funds, please review the criteria referenced below, which can be found on Fitch's web site at 'www.fitchratings.com'.

RATING ACTIONS

First Puerto Rico AAA Target Maturity Fund I
--Medium-Term Notes series affirmed at 'AA';
--Short-Term Notes series affirmed at 'F1+'.

First Puerto Rico AAA Target Maturity Fund II
--Medium-Term Notes series affirmed at 'AA';
--Short-Term Notes series affirmed at 'F1+'.

First Puerto Rico Target Maturity Income Opportunities Fund I
--Medium-Term Notes series affirmed at 'A';
--Short-Term Notes series affirmed at 'F1'.

First Puerto Rico Target Maturity Income Opportunities Fund II
--Medium-Term Notes series affirmed at 'A';
--Short-Term Notes series affirmed at 'F1'.

First Puerto Rico Tax-Advantaged Target Maturity Fund I
--Medium-Term Notes series affirmed at 'AA';
--Short-Term Notes series affirmed at 'F1+'.

First Puerto Rico Tax-Advantaged Target Maturity Fund II
--Medium-Term Notes series affirmed at 'AA';
--Short-Term Notes series affirmed at 'F1+'.

First Puerto Rico Tax-Exempt Fund
--Medium-Term Notes series affirmed at 'A';
--Short-Term Notes series affirmed at 'F1'.

First Puerto Rico Tax-Exempt Target Maturity Fund II
--Medium-Term Notes series affirmed at 'A';
--Short-Term Notes series affirmed at 'F1'.

First Puerto Rico Tax-Exempt Target Maturity Fund III
--Medium-Term Notes series affirmed at 'A';
--Short-Term Notes series affirmed at 'F1'.

First Puerto Rico Tax-Exempt Target Maturity Fund IV
--Medium-Term Notes series affirmed at 'A';
--Short-Term Notes series affirmed at 'F1'.

First Puerto Rico Tax-Exempt Target Maturity Fund V
--Medium-Term Notes series affirmed at 'A';
--Short-Term Notes series affirmed at 'F1'.