Correction: Fitch Rates Greenville County, South Carolina's 2006 GOs 'AAA'; Outlook Stable.

NEW YORK -- (This amends a press release originally issued on Sept. 22 contains a revision in the first paragraph. The new series is 2006, not 2006A.)

Fitch rates Greenville County, South Carolina's $10.1 million general obligation (GO) bonds, series 2006 'AAA'. The bonds are scheduled to sell competitively on Oct. 17, 2006. Fitch also affirms the 'AAA' rating on the county's approximately $58 million outstanding GO bonds. The Rating Outlook is Stable.

Greenville County's 'AAA' GO bond rating reflects its excellent fiscal management and planning, supported by strong reserves; low direct debt burden; and stable and diversifying economy. Budgetary pressures appear to be increasing, driven primarily by growth in personnel expenditures, new state statutes limiting revenue-raising ability and a lack of a tax rate increase, though this is offset by consistent growth in recurring revenues from a variety of sources. Maintenance of the current rating and Stable Rating Outlook will hinge on officials' ability to manage growing operating costs and to preserve budgetary stability and financial flexibility.

Greenville County is located in northwestern South Carolina, along the Interstate 85 (I-85) corridor between Charlotte, NC and Atlanta. The County is a significant regional economic center with access to major healthcare service providers, three airports, and several colleges and universities. The manufacturing sector remains the major source of employment, although the economy has diversified away from textiles to durable goods. Foreign investment is considerable, with close to 80 international companies reportedly located in the county. The county's unemployment rate remains been below that of the state, but now exceeds the nation, and county wealth levels while historically high are now approaching average.

The county's sound management is evidenced by its strong operations and multiyear financial forecasting. Historically, financial results have produced sizable operating surpluses and general fund balances that consistently exceeded 50% of expenditures, transfers out, and other uses. Despite a large spike in pay-as-you-go capital expenditures for fiscal 2005 that resulted in a decline in overall fund balance, unreserved fund balance has remained at robust levels. The estimated unreserved general fund balance for fiscal year 2006 is a still solid 33% of total expenditures and transfers out for capital projects.

Although a multiyear financial plan indicates adherence to the county's policy of maintaining the general fund's undesignated fund balance above 25% of estimated annual recurring revenues, Fitch Ratings believes budgetary pressure may arise from a constant property tax rate, an increase in personnel, and a 3.5% average salary hike. Nevertheless, strong reserve levels remain a source of financial flexibility and salary hikes are expected to raise pay levels to those competitive with other South Carolina communities.

Direct debt levels are low and are expected to remain modest. The debt service burden remains manageable and is mitigated by the rapid principal amortization rate. Overall debt ratios are moderate, reflecting a large capital improvement program (CIP) by the Greenville County School District. Although overall debt is above average for the rating category, the school construction program should enhance the county's economic growth prospects.

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.