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TEXT-Fitch affirms 6 Nuveen muni closed-end funds
February 29, 2012 / 10:44 PM / in 6 years

TEXT-Fitch affirms 6 Nuveen muni closed-end funds

Feb 29 - Fitch Ratings affirms the 'AAA' ratings assigned to the
MuniFund Term Preferred Shares (MTP Shares) issued by the following municipal
closed-end funds managed by Nuveen Fund Advisors, Inc. (NFA) and subadvised by
Nuveen Asset Management, LLC (NAM):	
--Nuveen California Dividend Advantage Municipal Fund 2 (NYSE AMEX:
--Nuveen Connecticut Dividend Advantage Municipal Fund (NYSE AMEX: NFC);	
--Nuveen Connecticut Dividend Advantage Municipal Fund 2 (NYSE AMEX:
--Nuveen North Carolina Dividend Advantage Municipal Fund (NYSE AMEX:
--Nuveen North Carolina Dividend Advantage Municipal Fund 2 (NYSE AMEX:
--Nuveen Massachusetts Dividend Advantage Municipal Fund (NYSE AMEX:
A complete list of the associated MTP Shares follows at the end of this press
The 'AAA' ratings are based on asset coverage provided to the MTP Shares by the
funds' portfolios, structural protections afforded by mandatory deleveraging
provisions in the event of asset coverage declines, the legal and regulatory
parameters that govern the funds' operations and the capabilities of NFA as
investment advisor and NAM as subadvisor.	
As of Jan. 31, 2012, the funds' pro forma asset coverage ratios for total
outstanding preferred shares, as calculated in accordance with the Investment
Company Act of 1940, were in excess of the minimum asset coverage of 225%
required by the funds' governing documents (Preferred Asset Coverage Test).	
Also as of the same date, the funds' pro forma effective leverage ratios were
below the maximum leverage ratio of 50% allowed by the funds' governing
documents (Effective Leverage Test).	
In the event of asset coverage declines, the funds' governing documents will
require the funds to reduce leverage in order to restore compliance with the
overcollateralization (OC) test(s) breaching the required threshold(s).	
Fitch performed various stress tests on the funds to assess the strength of the
structural protections available to the MTP shares compared to the rating
stresses outlined in Fitch's closed-end fund rating criteria. These tests
included determining various 'worst case' scenarios where the funds' leverage
and portfolio composition migrated to the outer limits of the funds' operating
and investment guidelines.	
Only under remote circumstances, such as increasing the funds' issuer
concentration, while simultaneously migrating the portfolios to 80% 'BBB', 10+
years to maturity bonds and 20% high yield bonds, did the asset coverage
available to the MTP Shares fall below the 'AAA' threshold, and instead passed
at an 'AA' rating level.	
Given the highly unlikely nature of the stress scenarios, and the minimal rating
impact, Fitch views the funds' permitted investments, municipal issuer
diversification framework and mandatory deleveraging mechanisms as consistent
with an 'AAA' rating.	
The funds are closed-end management investment companies regulated by the
Investment Company Act of 1940. The funds currently invest primarily in
investment grade quality municipal bonds exempt from regular federal and
state-specific income tax. The MTP Shares are fixed-rate preferred stock.	
NFA, a subsidiary of Nuveen Investments, is the funds' investment advisor,
responsible for the funds' overall investment strategies and their
implementation. NAM is a subsidiary of NFA and oversees the day-to-day
operations of the funds. Nuveen Investments and its affiliates had approximately
$207 billion of assets under management as of Oct. 31, 2011.	
The ratings assigned to the MTP shares may be sensitive to material changes in
the leverage composition, portfolio credit quality or market risk of the funds,
as described above. A material adverse deviation from Fitch guidelines for any
key rating driver could cause ratings to be lowered by Fitch.Applicable Criteria and Related Research:	
--'2012 Outlook: Closed-End Fund Leverage' (Dec. 19, 2011);	
--'Closed-End Funds: Derivatives Under Review' (Nov. 16, 2011);	
--'Rating Closed-End Fund Debt and Preferred Stock' (Aug. 16, 2011).	
Applicable Criteria and Related Research:	
Rating Closed-End Fund Debt and Preferred Stock	
Closed-End Funds: Derivatives Under Review (Increased Use and Limited
Transparency Are Key Considerations)	
2012 Outlook: Closed-End Fund Leverage

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