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Rating Action:

Moody's Assigns Aaa/P-1 Ratings to Nuveen Variable Rate Demand Preferred Shares Issued by Four Closed-End Municipal Bond Funds

16 Dec 2010

Approximately $469 million preferred shares issued to retire auction rate securities

New York, December 16, 2010 -- Moody's assigned Prime-1 short-term and Aaa long-term ratings to the Nuveen Variable Rate Demand Preferred Shares ("VRDP") issued by four closed-end municipal bond funds, including:

• Nuveen California Investment Quality Municipal Fund, Inc. (NYSE: NQC) 956 Series 1 VRDP Shares, $95.6 million

US$95.6M Series 1 Variable Rate Demand Preferred Shares Preferred Stock, Assigned Aaa/P-1

• Nuveen California Performance Plus Fund, Inc. (NYSE: NCP) 810 Series 1 VRDP $81.0 million

US$81M Series 1 Variable Rate Demand Preferred Shares Preferred Stock, Assigned Aaa/P-1

• Nuveen New York Quality Income Municipal Fund, Inc. (NYSE: NUN) 1,617 Series 1 VRDP Shares, $161.7 million

US$161.7M Series 1 Variable Rate Demand Preferred Shares Preferred Stock, Assigned Aaa/P-1

• Nuveen Premier Insured Municipal Income Fund, Inc. (NYSE: NIF) 1,309 Series 1 VRDP Shares, $130.9 million

US$130.9M Series 1 Variable Rate Demand Preferred Shares Preferred Stock, Assigned Aaa/P-1

RATINGS RATIONALE

The short-term ratings, which address Moody's expectation of timely repayment of liquidation preference of the VRDP in the event of an optional or mandatory tender, are based upon the VRDP liquidity purchase agreement provided by Citibank, N.A., the structure of each transaction and credit- worthiness of the bank providing the liquidity purchase agreement.

Moody's long-term ratings assigned to the Variable Rate Demand Preferred Shares, which address the funds' ability to honor optional or mandatory redemptions as well as their ability to meet dividend obligations, are based upon the funds' current Moody's strong coverage ratios as well as the Investment Company Act of 1940 (1940 Act) coverage ratios that are all substantially in excess of the preferred share obligations, adherence to conservative asset coverage maintenance provisions, deleveraging procedures in the event of a coverage ratio breach as well as Nuveen's effective portfolio management practices

Short-Term Ratings Assigned to VRDP Address Credit Quality of Liquidity Provider and Unconditional Nature of the Liquidity Facility

The Prime-1 ratings reflect Moody's assessment that VRDP holders will be able to tender their shares unconditionally to the liquidity provider in a timely manner given the terms of the VRDP liquidity purchase agreement provided by Citibank, N.A. (currently rated A1/ P-1). The liquidity provider agrees to purchase the rated shares on any business day with a 7-day tender notice for sale. As such, Moody's short-term ratings associated with the VRDP are linked to the creditworthiness of the liquidity provider and may change whenever the short-term rating of the bank is changed. The liquidity agreement has no automatic termination events or conditions precedent to funding, making it an unconditional agreement to purchase unremarketed shares. The Prime-1 rating will expire upon the earlier of the termination of the VRDP purchase agreement or December 15, 2011.

In addition, Moody's cites the inclusion of mandatory tender events to address any unscheduled termination of the liquidity agreement. The occurrence of these events would put in motion a notification process whereby VRDP holders are apprised of a mandatory tender. Included in the mandatory tender events are the: (i) downgrade of the liquidity provider rating; (ii) failure of the fund to pay scheduled dividends; (iii) breach of an effective leverage covenant continued for 60-days (if declared a mandatroy tender event by the liquidty provider); (iv) a restructuring event affecting the liquidity provide; (v) failure of the fund to remit fees to the liquidity provider for services rendered (if declared a mandatory tender event by the liquidity provider), (vi) changes to special rate periods, and (vii) substitution of the liquidity provider. The liquidity provider also has a mandatory purchase obligation with respect to all outstanding VRDP shares upon termination of the liquidity agreement.

Once the VRDP shares are tendered to the liquidity provider, either through an optional or a mandatory tender, the liquidity provider, which does not have recourse to the fund, has no automatic termination events or "outs" which would allow the liquidity provider not to fund. The liquidity provider benefits from a heightened dividend rate penalty mechanism that is designed to increase the possibility that VRDP shares would be remarketed. A penalty rate mechanism linked to a base rate plus applicable spread systematically increases over time. The base rate is linked to the long term rating assigned to the VRDP shares and is subject to a maximum of 15%.

VRDP shareholders will have the option to tender their VRDP shares for remarketing and purchase on any business day not less than seven days after delivery of a notice of tender to a tender and paying agent appointed by the funds, with the consent of the liquidity provider, at the purchase price. The remarketing agent will use its best efforts to remarket any VRDP shares so tendered. In the event no remarketing occurs on or before the relevant purchase date, or VRDP shares remain unsold pursuant to an attempted remarketing, the tender and paying agent will deliver all unsold VRDP shares to the liquidity provider for purchase on such purchase date.

Proceeds from the VRDP Shares issuance will be used to defease and redeem in full each fund's outstanding Municipal Auction Rate Cumulative Preferred Shares (MuniPreferred shares). Pending their redemption following the required notice period, the Aaa ratings assigned to each fund's MuniPreferred shares are affirmed.

Leverage levels within each of the four funds are expected to remain at or near current levels. Calculated on a pro-forma basis, these range between 28% to 32% of managed assets and 3% to 41%, including exposures to tender option bonds.

Long Term Ratings Assigned to VRDP Aligned with Overcollateralization of Preferred Shares

Moody's Aaa long-term ratings assigned to the VRDP reflect each fund's modest leverage, Moody's strong coverage ratios combined with asset maintenance procedures that require funds to delever in the event the discounted values of portfolio assets decline below the preferred shares par amounts. This is in addition to the limitations and asset coverage testing requirements superimposed by the Investment Company Act of 1940 which limit leverage in the form of preferred stock to an asset coverage ratio of 200%. These guideposts work in tandem to reinforce coverage sufficiency for the VRDP in connection with the ratings.

In addition, the liquidity profile of each portfolio is consistent with the collateral discount factors that seek to simulate price declines in the event of a forced liquidation of assets to meet a mandatory redemption. In this connection, Moody's historical asset coverage levels for each fund, since their inception, have not declined below the Moody's basic maintenance amount threshold of 100% for Aaa rated instruments with exposure periods of seven weeks. The credit quality of portfolio assets, with over 65% of portfolio assets in investment grade securities, and strategies to diversify by issuer and sector also support the strong asset coverage levels for these funds with total net asset that range from about $288 million to $562 million.

At the same time, 1940 Act asset coverage levels in excess of 200% have consistently been maintained by each of the funds since the issuance of the preferred stock. Given these levels of overcollateralization and the types of assets owned by the funds, the Aaa ratings reflect Moody's view that the funds are expected to pay full liquidation preference amounts upon redemption either due to a mandatory or voluntary redemption by each of the funds, including the distribution of fund assets upon liquidation. Moody's long-term ratings also address full and timely payment of dividends, subject to rate periods that could change from time-to-time due to special-rate period designations and maximum rate spread under certain circumstances.

That said, Moody's long-term ratings may change if asset coverage levels decline or in the event that future capital structure changes that restrict a fund's abilities to meet preferred shares optional or mandatory redemptions.

At the time of their issuance, asset coverage levels for each of the funds were, as follows:

Moody's (>100%) 1940 Act (>200%)

Nuveen New York Quality Income Municipal Fund (NUN) 136% 315%

Nuveen Premier Insured Municipal Income Fund (NIF) 148% 310%

Nuveen California Investment Quality Municipal Fund (NQC) 149% 292%

Nuveen California Performance Plus Fund (NCP) 141% 316%

Nuveen Asset Management is the investment adviser for the funds, responsible for determining each fund's overall investment strategy. Nuveen Investments and its affiliates had approximately $163 billion of assets under management as of September 30, 2010, of which approximately $76.5 billion was in municipal securities.

The ratings assigned to the VRDP are not recommendations to purchase, hold or sell those shares or their suitability for a particular investor. Also, Moody's ratings applicable to the preferred stock addresses the full-liquidation-preference amount paid upon redemption, either due to a mandatory or voluntary redemption, including the distribution of the Fund assets upon liquidation. The ratings also address the full and timely payment of dividends, subject to rate periods that could change from time to time due to special-rate period designations and appropriate notices/conventions.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service information, and confidential and proprietary Moody's Analytics information.

Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating.

Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.

New York
Henry Shilling
Senior Vice President
Managed Funds Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Daniel Serrao
Senior Vice President
Managed Funds Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Assigns Aaa/P-1 Ratings to Nuveen Variable Rate Demand Preferred Shares Issued by Four Closed-End Municipal Bond Funds
No Related Data.
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