I believe you are correct that it's not fractional, their website claims "100% Backed - Every tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USD₮ is always equivalent to 1 USD." [1]
The whitepaper abstract also states "issued tokens are fully backed and reserved at all times." [2]
Tether claims to be full reserve. The contention people have is that there is little to know proof that they are _actually_ full reserve. Also, there is risk in Tether that some government will seize all of their assets (there is lots of precedence for this).
The whitepaper abstract also states "issued tokens are fully backed and reserved at all times." [2]
[1] https://tether.to/
[2] https://tether.to/wp-content/uploads/2016/06/TetherWhitePape...