Fitch Rates $27.525MM Radnor, Pennsylvania GOs 'AAA'.

Business Editors

NEW YORK--(BUSINESS WIRE)--Sept. 13, 2002

Fitch Ratings assigns an 'AAA' rating to Radnor, Pennsylvania's (the town) $20.025 million general obligation refunding bonds, series A 2002 and $2.5 million general obligations, series AA 2002, selling by negotiated the week of Sept. 16. The financial advisor is Fairmount Capital Advisors, the lead underwriter is Commerce Capital Markets, Inc., and the bonds mature serially from 2003-2017. Fitch also affirms the 'AAA' rating to Radnor's $6.885 million of outstanding general obligation bonds, series 1992 & 1996, which will remain after the refinancing. The Rating Outlook is Stable.

The 'AAA' rating reflects superior wealth, income and property values in the town, above average debt which is manageable in the context of the town's tax base, wealth and financial operations, modest future capital needs, and sound financial operations. The rating also reflects the implementation of financial management best practices, such as the town's maintenance of general fund reserves for contingencies and working capital needs; the incorporation of multi-year financial forecasting in the annual budget process; a strong monthly financial reporting and monitoring system that tracks the adopted budget and is comparable to historical financial results; and a strong commitment to pay-as-you-go funding for capital maintenance and expansion.

In addition to refinancing $25 million of debt for cash flow savings, the town will be using the new money portion for additional land acquisition for open space and recreation. The town's infrastructure is solid, and future debt needs are manageable. This issue is retired in 15 years, in line with township policies for rapid debt retirement for capital spending. The town's overall debt retirement is average at 52% in 10 years primarily because of bond issues in 1994 and 1996 used to purchase land for maintaining green space and the town's bucolic environment; the 30 year maturity schedules for those projects is far below the useful life of the land purchases. Overall debt is a high $4,249 per capita, but only 4.5% of market value. Direct debt is only $1,122 per capita, 1.2% of market value, and a manageable 15% of annual general fund spending. Debt ratios are virtually unchanged since the last sale of debt in 2000.

Radnor's tax base demonstrates superior strength, marked by income levels that are twice the national average; housing values that are 2.7 times the national average; and a substantial commercial base that represents 34% of total assessed values. A revaluation for fiscal 2000 resulted in a 23% increase in market value. Market value per capita is very high at $96,000, based on the 2000 Census population of 30,878. The town is more than a wealthy suburb of Philadelphia; tax records indicate the number of jobs based within Radnor exceed 25,000, which is well in excess of the township's adult population. Major employers include Villanova University, Wyeth Ayerst Pharmaceutical Labs, News America Publishing (TV Guide) and Cabrini College. Since 1990, prices for most new home construction ranged from $465,000 to $2.5 million on 367 properties, with an average selling price of over $710,000.

After small deficits of about $300,000 in 1991-92, the town has built its general fund balance to $8.9 million for fiscal 2001, representing a solid 51% of annual spending of $14.7 million. The build-up is in line with internal policies started in fiscal 1993, which target working capital general fund reserves approximating annual debt service and the town's share of employee medical insurance costs. The surplus build-up has been led by strong performance of the town's business privilege taxes, real estate transfer taxes, and building permit fees. Tax rates have been stable, and the town projects balanced operations for 2002. Future plans call for moderate additional debt, and one-time use of some of the large surplus for administration building modernization.