Amendment: Fitch Rates Howard County, Maryland's $117MM GOs 'AAA'; Outlook Stable.

NEW YORK -- (This is an amendment for a press release that was published November 26, 2007. It amends the dollar amounts in the headline and first paragraph and the dollar-per-capita amount in the last paragraph.)

Fitch Ratings assigns an 'AAA' rating to Howard County, Maryland's (the county) estimated $116.7 million general obligation (GO) bonds, 2007 series B, consisting of $104.5 million consolidated public improvement refunding bonds, 2007 series B and $12.1 million metropolitan district refunding bonds, 2007 series B. The GOs are scheduled to price via negotiated sale on Dec. 5, 2007. Public Financial Management serves as the financial advisor and Bear, Stearns & Co. Inc. leads a syndicate of underwriters. In addition, Fitch affirms the county's $653 million outstanding GOs at 'AAA'. The Rating Outlook is Stable.

The 'AAA' rating reflects Howard County's deep and diverse economy, strong financial management, affluent residents and a moderate and rapidly retired debt burden. The county's financial position is strong, with ample liquidity, sound general fund reserves above the charter-mandated level, and excellent financial planning. Current and projected tax-supported debt levels are affordable.

Howard County's relative affluence, high quality of life, excellent schools, and proximity to both Baltimore and Washington, D.C. have resulted in continued strong demand for housing and related commercial expansion. Repeatedly listed as one of the best places to live in popular magazines, the county controls its growth, limiting new housing units to 1,850 annually and placing 10% of its land under permanent farmland preservation easements. Further growth is anticipated as recent Base Realignment and Closure Commission (BRAC) recommendations will bring the Defense Information Systems Agency and other Defense departments' activities to Ft. Meade, in adjacent Anne Arundel County. Assessed valuation growth has been solid, averaging 10.0% annually since fiscal 2000; Fitch anticipates that the county's assessment process will shelter it, at least in part, from market declines over the next few fiscal years. Residential employment remains strong, with the September 2007 unemployment rate of 2.7% comfortably below the state's 3.6% and the nation's 4.7%. Wealth and income indicators are high, with per capita personal income 25% above state and 53% above national averages.

Financial operations are stable after a difficult recessionary period, during which the loss of capital gains and bonus income severely eroded income tax collections. Strong financial management increased the fiscal 2007 unreserved general fund balance to $67.3 million, representing a high 9.2% of spending, from a negligible $307,500, or 0.1% of spending, in fiscal 2003. The county has restored the general fund charter reserve to 7% of the prior year's audited expenditures and is increasing its pay-as-you-go funding for capital needs. In fiscal 2007, the county designated $15 million of its fund balance to fund its obligations for healthcare and other post-employment benefits (OPEB).

Debt levels are moderate and expected to remain so. After a planned $105 million bond sale in early 2008, direct net debt will equal $2,935 per capita and 2.0% of market value, and amortization will remain above average at 67.4% in 10 years. In addition to ongoing long-term borrowing, the county continues to borrow on a short-term basis to provide for interim financing of the capital improvement program (CIP). The current series will refund approximately $100 million of long-term debt, while the sale in early 2008 will redeem $100 million of outstanding bond anticipation notes and refinance them on a long-term basis. The fiscal 2009 through 2013 CIP totals $1.2 billion, with 54% of planned spending for the highly regarded kindergarten through grade 12 school system and the local community college. Tax supported debt will fund 69% of the CIP. A spending affordability advisory committee annually measures debt affordability and operating projections.

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.