Correction: Fitch Rates Georgia's $240.67MM GO Bonds 'AAA'.

Business Editors

NEW YORK--(BUSINESS WIRE)--Oct. 7, 2002

(This is an amended version of a press release dated Oct. 4, 2002, which includes updated information in the first paragraph.)

Fitch Ratings assigns the State of Georgia's $240,670,000 general obligation bonds of 2002E & 2002F, for bids Oct. 8, an 'AAA' rating. The 'AAA' rating assigned to $6.15 billion general obligation bonds is affirmed. The $24,880,000 2002E bonds will be due Nov. 1, 2003-07 and are non-callable, while the $215,790,000 2002F bonds will be due Nov. 1, 2003-22 and will be callable beginning Nov. 1, 2012 at par.

Georgia's superior credit standing results from excellent debt policies, past growth and potential for future development, and consistent maintenance of conservative and sound financial operations. Financial operations for the seven fiscal years through 2001 had been very favorable, in part a result of very conservative revenue estimates, producing annual surplus in the $800 million to $1 billion range. This past year, the national recession and the events of September 11 have significantly affected Georgia's high growth economy, and along with lower capital gains realizations, has resulted in revenue declines necessitating expenditure reductions and utilization of surplus. Reserves still exceed $1.0 billion including the revenue shortfall reserve fully funded at the maximum 5% of revenues, however resumption of growth will be required to return to balanced operations.

Fiscal 2001 closed with over $900 million in unreserved balances which were carried forward, in addition to $734 million in the revenue shortfall reserve. In fiscal 2002 revenue collections were down in every month in fiscal 2002, and registered a 4.7% decline for the full fiscal year. Weakness centered on the personal income tax, and the sales tax. The undesignated surplus of $918 million at the end of fiscal 2001 is estimated to have reduced to $174 million at June 30, 2002 or 1.2% of revenues.

The budget for fiscal 2003 reflects revenues increasing 4.5%. Collections for the first two months were below the previous year's comparable period, although changes in collections processing makes year to year comparisons complicated. Nonetheless, revenues will have to increase by 5.1% for the remainder of the fiscal year in order to meet targets. Near term cushion is provided from over $1.0 billion in reserves or about 7.0% of revenues, including $700 million in the revenue shortfall reserve.

Employment began to decline in the summer of 2001 and the 2001 level increased by only 0.1% after many years of annual gains in excess of 3%. Manufacturing declined by 5.7%. Manufacturing declines have been stabilizing, down 1.2% in August 2002 compared to the same month the previous year, however total employment is down 2.3% for the same period. The downturn in air travel has had a pronounced effect given the importance of Hartsfield Airport and related air carriers in the Atlanta area. Personal income growth was 115% of the national average in 2001, although it represents a slowing to 3.8% growth from 8.6% in 2000. All of Georgia's bonds are general obligation or state guaranteed. While debt issuance has been increasing recently, debt ratios are moderate with net tax-supported debt of $6.9 billion, or $842 per capita, 1.1% of estimated full value, and about 2.9% of personal income.