Correction: Fitch Rates Las Vegas, Nevada's McCarran Int'l Airport Revs 'A+'; Stable Otlk.

SAN FRANCISCO -- (This is an amended version of a press release issued today and contains revised information in the first two paragraphs.)

Fitch Ratings assigns an underlying 'A+' rating to Clark County, Las Vegas, Nevada's McCarran International Airport passenger facility charge (PFC) refunding revenue bonds, as follows:

-- $130,000,000 series 2005A-1 (AMT);

-- $129,900,000 series 2005A-2 (AMT).

Fitch also assigns an 'A+' rating to $60,175,000, adjustable-rate airport system subordinate lien revenue bonds, series 2005B (AMT). The Rating Outlook is Stable. Fitch expects to assign long- and short-term ratings to the 2005 A-1 and A-2 bonds nearer to closing. The ratings are expected to be based upon insurance provided by MBIA and upon liquidity support to be provided by Bayerische Landesbank and Citibank, N.A. The 2005 bonds are expected to price, on a negotiated basis led by Citigroup, on or about March 31.

Fitch also affirms the 'AA-' rating on approximately $221 million airport system senior lien revenue bonds and the 'A+' rating on $1.1 billion airport system subordinate lien revenue bonds and $272 million passenger facility charge/airport system subordinate lien revenue bonds. Finally, Fitch affirms the 'A' rating on $105 million 2003C jet aviation fuel tax and airport system third lien revenue bonds. The Rating Outlook is Stable on all liens.

The Clark County Department of Aviation (department) consists of Las Vegas' McCarran International Airport (McCarran) and five other general aviation or reliever facilities. Series 2005 bond proceeds will be used to refund the series 1995 PFC revenue bonds. PFC revenues are the primary revenue source for the series 2005 A-1 and A-2 bonds; however, net airport revenues, after payment of senior lien bonds, secure all the 2005 bonds.

The strong ratings reflect McCarran's large origination and destination passenger base and healthy airline market share diversity, which produce consistently high financial margins. Total enplaned passengers increased 10.4% in fiscal 2004, after rebounding modestly (4.1%) in fiscal 2003 from a significant decline (9.1%) in fiscal 2002. Overall, McCarran's enplanements increased 117% from 1990-2004, resulting in 19.5 million enplaned persons by the end of the period. Thirty-two carriers provide scheduled and charter service, including a strong presence from Southwest Airlines (32% of the overall market share) and America West (17%). The Las Vegas region itself is a destination, evidenced by the low percentage (12%) of connecting passengers. Good management and the use of a hybrid rate-making methodology generate excellent annual financial results, as reflected by a strong balance sheet, $90 million in cash and equivalents, and $872 million in restricted assets in fiscal 2004.

The fiscal 2004 operating ratio was a healthy 49% and non-airline revenues as a percentage of operating revenues remain high at 50%. Debt service coverage (including the coverage funds) on the senior and subordinate bonds was well above the 1.25 times (x) and 1.10x rate covenants, at 4.09x and 2.66x, respectively, in fiscal 2004. Furthermore, the fiscal 2004 landing fee was $1.22 and the cost per enplaned passenger was $4.76, both of which are very competitive within the airline industry. Lastly, McCarran serves the ever-growing Las Vegas region with a 2003 resident population of 1.7 million and 36 million visitors.

Credit concerns center on McCarran's increasing debt burden, variable-rate exposure, and use of swaps. Of the approximately $2 billion currently outstanding in revenue bonds, 16% is variable-rate and another 32% is synthetically fixed-rate. While these figures are high, management's debt strategies seem reasonable, and the risks are somewhat mitigated by McCarran's solid cash balances and annual operating profits. Swap oversight is directed through a draft swap policy, advice from a financial advisor, and a policy of marking-to-market and quarterly reporting. Also of concern is the Las Vegas service area's economy, which remains concentrated in the gaming, tourism, and convention industries. Consequently, the region's economy is dependent on the economic health of the country and propensity of the nation to spend on leisure activities. However, growth in the nongaming sectors outpaced the gaming sector in recent years and unemployment remains lower than that of the nation at 5.2 % during fiscal 2003. Finally, McCarran has a large demand-driven airport capital improvement program (in excess of $1 billion) requiring additional future debt. Although the timing and funding of these developments remains unknown, Fitch will continue to monitor its development.