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]

[1] https://tether.to/

[2] https://tether.to/wp-content/uploads/2016/06/TetherWhitePape...

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).