Amend: Fitch Rates Florida Dept. of Environ Protection $145.04MM Florida Forever Revs 'AA-'.

NEW YORK -- This is an amendment for a message issued on Oct. 18, 2007. It revises the estimated maximum annual debt service coverage (MADS) figure in the second to last paragraph.

Fitch Ratings has assigned an 'AA-' rating to the Florida Department of Environmental Protection's $145.04 million Florida Forever revenue bonds, series 2007B. The bonds will sell competitively on 18-hours notice. In addition, Fitch also affirms the underlying rating of Florida Department of Environmental Protection's $2.4 billion of outstanding Preservation 2000 and Florida Forever bonds and $98.4 million of outstanding Florida Everglades bonds at 'AA-'.

The 'AA-' ratings primarily reflects the strong coverage for bond debt service provided by pledged documentary stamp taxes, as well as various covenants limiting the ability to issue additional debt, and considers the tax volatility associated with Florida's real estate market. Although the pledged revenues experienced a dramatic drop-off in fiscal 2007 and another large decline is forecasted for fiscal 2008, anticipated coverage levels remain healthy based on current projections. The taxes are levied on real estate transfers, mortgages, and other securities transactions.

The state has levied documentary stamp taxes for 70 years and has issued land acquisition bonds of several types since 1964. Such issues included the Preservation 2000 bonds beginning in 1991 and Florida Forever bonds since 2001, pursuant to a constitutional amendment. Preservation 2000 and Florida Forever provide for revenue bond issuance to acquire land and water areas for conservation, recreation, water resource development, and preservation. State law now limits issuance under the Preservation 2000 program to bond refundings. The state separately limits issuance under the Florida Forever program to a maximum of $3 billion. No more than $600 million of pledged taxes may annually be used for debt service on Preservation 2000 and Florida Forever bonds.

The Everglades Restoration revenue bonds are for acquiring and improving land and water areas, including water supply and flood protection, under the 35-year $10.9 billion Everglades Restoration program, a joint federal, state, and local endeavor. The Everglades Restoration bonds were approved by constitutional amendment in 1998, with a subsequent statutory authorization for up to $800 million in bonds payable from a junior lien at that time on pledged documentary stamp tax revenues. The amount expected to be bonded has been reduced by the $400 million of cash-funded project costs since fiscal 2003 when the program was started.

The 2006 Florida Legislature elevated the Everglades Restoration bond lien to parity status with the Preservation 2000 and Florida Forever bonds. The additional bonds test remains at 150% of maximum annual debt service coverage (MADS), and must now take into account debt service on the variable rate Everglades Restoration Bonds at the maximum interest rate permitted for such bonds.

Current law and covenants require that 62.63% of documentary stamp taxes, after a 7% general fund service charge, must be used first for payment of debt service. In the event of revenue insufficiency, the 7% service charge would be waived under state law. Pledged revenues, net of the service charge, equaled $765 million in fiscal 2001 and $2.36 billion in fiscal 2006 - more than tripling during a period of low mortgage rates, second home buying, and increased investment in homes and condominiums; generally described as a housing boom. In fiscal 2007, pledged receipts plummeted 25% to under $1.77 billion, as the state has entered a housing market correction evidenced by stark decelerations or declines in housing starts, existing home sales, and sale prices and a rapid rise in mortgage delinquencies and foreclosures.

The state holds periodic revenue estimating conferences that meet at least twice a year to revise economic projections, including those assumptions used to derive estimated documentary stamp tax collections. In March 2007, the conference cut further the anticipated fiscal 2007 receipts to nearly align the forecast with actual fiscal 2007 results. Held in August 2007, the most recent conference reduced further the projected fiscal 2008 collections, which are now anticipated to drop 13.6% from fiscal 2007 levels. Modest growth is anticipated to return in fiscal 2009. Current and expected debt service should remain well-covered. Estimated fiscal 2008 pledged taxes cover MADS after this sale by 3.9 times (x) and 3x when full authorization, pro forma, for the Preservation 2000, Florida Forever, and Everglades Restoration revenue bonds is considered.

The series 2007B revenue bonds are due July 1, 2008-2027 with bonds due July 1, 2018 and thereafter callable on July 1, 2017 at 101%.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.