Auburn,AL GO Bonds Rated A+ by S&P;Rating Affirmed.

NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 6/9/98-- Standard & Poor's today assigned its single-'A'-plus rating to Auburn, Ala.'s G.O. bonds series 1998 dated June 1, 1998 due Aug. 1, 2015. The bonds are scheduled to sell June 11, 1998.

At the same time, Standard & Poor's affirmed its single-'A'-plus rating on Auburn's outstanding G.O. debt.

The rating affirmation is based upon continued economic development activity and financial stability.

The rating reflects the steady presence of Auburn University and an economic base undergoing continued growth and diversification. Other factors include a manageable debt burden and good financial performance.

Strong revenue growth and expenditure control enabled the city to increase its undesignated general fund balance at Sept. 30, 1997 to $4.2 million, or a healthy 18.7% of general fund expenditures, an increase of $1.8 million from fiscal year-end 1996. The city anticipates closing fiscal 1998 maintaining approximately the same level of undesignated general fund balances. Revenues are diverse, with sales and occupational license taxes providing 62% of fiscal 1997 general fund revenues of $23.1 million. Both of these taxes may be increased by the council at any time, giving the city significant revenue flexibility.

The local economy is anchored by Auburn University, the largest employer with 5,000 employees. A large student population helps cement the city's role as a retail trade center. Recent expansions of the city's commercial and industrial sectors have helped diversify the local economy. The neighboring city of Opelika also provides significant employment opportunities, primarily in the manufacturing sector. Auburn's unemployment rate is typically 1%-2% below the state average, reflecting the stabilizing influence of the university on the local economy. Tax base growth is good, with assessed value increasing 7.8% annually between 1992-1998 to its fiscal 1998 level of $211 million. Good tax base growth rates are expected to continue, based on ongoing commercial and high-end residential construction.

Overall net debt is moderate and stable at $1,067 per capita and 3.8% of true value. Annual debt service is manageable and accounts for about 15% of annual operating expenditures. The city's five-year capital improvement program provides for about $4.5 million of additional G.O. debt issuance.

OUTLOOK: STABLE The outlook reflects Standard & Poor's expectation that economic growth and diversification will continue, resulting in an increased revenue base.---CreditWire

    CONTACT: Wendy Wipperman, New York (1) 212/208-8096
              Peter V. Murphy, New York (1) 212/208-1195
              For more information on criteria or subscriptions:
              http://www.ratings.standardpoor.com