September 1, 2014, and term bonds aggregating principal of $20,550,000 due from September 1, 2013 to 2015. These
bonds are payable solely from the revenue, money or property of the Administration.

The bonds are subject to redemption provisions at the option of the Administration. Redemptions are
permitted at premiums ranging up to 2.5% of the outstanding principal amount.

As of June 30, 1997, the Administration had $37,510,000 of debt defeased. The loss of $3,677,000 from the
defeasance is being deferred and amortized through interest expense through the year 2011.

Maryland State Lottery Agency (Lottery) —Notes Payable —

As of June 30, 1997, the Lottery had notes payable outstanding related to the financing of certain gaming
equipment. The balance outstanding as of June 30, 1997, is $6,503,000. Interest rates on the notes range from 4.6%
to 6.7%.

C. Long Term Obligations — Component Units:

Higher Education Fund —

Certain State higher education institutions have issued revenue bonds and mortgage loans payable for the
acquisition and construction of student housing and other facilities. Student fees and other user revenues
collateralize the revenue bonds. The mortgage loans payable are collateralized by real estate. Interest rates range
from 4.3% to 7.2% on the revenue bonds with the rate being 3% on the mortgage loans payable. In June 1992, and
during the year ended June 30, 1997, the University of Maryland System issued serial Equipment Loan Program
Obligations to finance the acquisition of new equipment and to refinance the balance of amounts due under certain
installment purchase agreements for equipment then in the possession of the System. Payments of principal and
interest, at rates ranging from 2.6% to 6.15%, are to be made semiannually through 2007. The Equipment Obligations
are callable, at the option of the System, at premiums of no more than 2% of the outstanding principal, beginning in
2003. Maturities of principal are as follows (amounts expressed in thousands).

Years Ending	Equipment Loan		Mortgages
June 30,	Program Obligations	Revenue Bonds	and Other	Total
1998..................................................................................................	$ 1,665	$ 25,770	$ 2,626	$ 30,061
1999..................................................................................................	1,750	27,388	2,169	31,307
2000..................................................................................................	1,595	29,106	1,968	32,669
2001..................................................................................................	1,690	27,243	1,814	30,747
2002..................................................................................................	1,775	24,963	1,890	28,628
2003 and thereafter.......................................................................	36,232	373,021	2,892	412,145
	$44,707	$507,491	$13,359	$565,557

The bonds issued are the debt and obligation of the issuing higher education institutions and are not a debt and
obligation of, or pledge of, the faith and credit of the State.

On July 2, 1997, the University of Maryland System issued $60,000,000 of University of Maryland System
Auxiliary Facility and Tuition Revenue Bonds, 1997 Series A (the 1997 Series A bonds). The 1997 Series A bonds
consist of serial and term bonds maturing through the year ended June 30, 2017, with stated rates of interest from
4.1% to 5.1%, and were issued at an aggregate discount of $235,000.

Obligations under capital leases of $6,914,000 exist as of June 30,1997, bearing interest at annual rates ranging
from 3.7% to 8.0%. Following is a schedule of annual future minimum payments under these obligations, along with
the present value of the related net minimum payments as of June 30, 1997, (amounts expressed in thousands).

Years Ending
June 30,	Amount
1998............................................................................................................................................	$ 800
1999............................................................................................................................................	753
2000............................................................................................................................................	672
2001............................................................................................................................................	659
2002........................................................,..........................................................................	701
2003 and thereafter.................................................................................................................	9,472
Total future minimum payments .......................................................................................	13,057
Less amount representing interest.......................................................................................	6,143
Present value of net minimum payments ...........................................................................	$ 6,914

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