Fitch Rates Broward County, Florida's $28.9MM Rfdg COPs Underlying 'AA'; Stable Outlook.

Business Editors

NEW YORK--(BUSINESS WIRE)--May 24, 2004

Fitch Ratings assigns an underlying 'AA' rating to Broward County, Florida's (the county) refunding certifications of participation (COPs), series 2004. Expected to be insured, the certificates are scheduled to price via negotiation the week of May 31 through a syndicate led by Siebert Brandford Shank and Co. The proceeds of the bonds will be used to refund the county's outstanding series 1994 COPs for an estimated present value savings of 4.9% of the refunded par. The certificates are scheduled to mature June 1 2005-2013. In addition, Fitch also affirms the 'AA' rating on $20.5 million outstanding COPs under the master lease. County lease payments are subject to appropriation. The Rating Outlook is Stable.

The 'AA' rating in based on the county's diverse economic base and sound prospects for continued expansion, an affordable debt burden, strong financial results and the strong legal features of master lease-purchase agreements related to this issue, as well as all prior certificates. The county funds a substantial portion of its capital program with self-supporting enterprise system revenues and other pay-as-you-go sources, resulting in a general fund balance drawdown in fiscal 2003.

The COPs are secured by lease payments made by the county to the trustee, as assignee of the Broward County Commission Governmental Leasing Corp. (the corporation), which is a not-for-profit corporation created to assist the district in lease-purchase financing. The obligation of the county to make lease payments is a limited obligation, payable solely from funds appropriated by the county from available revenues. The 2004 COPs are being issued pursuant to a master lease agreement, which provides strong incentives for appropriation. In the event of non-appropriation, the county must surrender all leased facilities to the trustee.

Located on the southeast coast and containing the city of Fort Lauderdale, Broward County is among the largest counties in population in the U.S. four airports, including the Fort Lauderdale-Hollywood International Airport (FLL, whose system revenue bonds are rated 'A+' by Fitch), which are located in the county. FLL has performed well and is one of only a few large hub U.S. airports to experience positive growth in passenger traffic in 2003; growing 6.2% to record levels. In addition, demand continues to grow at Port Everglades (port facility revenue bonds rated 'A' by Fitch), a leading international cruise port. Even though population continues to increase at a healthy pace, growth has slowed somewhat as the county approaches build-out, projected between 2010 and 2020. The 2003 average unemployment rate was above the state's but below the nation's.

The county's financial position is strong. The undesignated general fund balance has grown steadily over the last several years, and following a $13.6M drawdown in fiscal 2003, is projected to remain stable in 2004 at a healthy 15% of general fund expenditures. Growing expenditure needs, mainly for public safety, have been adequately funded by healthy revenue growth. Although plans to completely incorporate the county by 2005 may be aggressive, state-shared revenue streams will likely decline as the plan progresses, however, the estimated revenue declines are modest and should be offset by the projected savings from increased efficiency in service delivery. Currently under 5% of the county's population is in unincorporated areas. Assessed value (AV) growth has been substantial over the last five fiscal years, averaging 7.6% annually and tax collections remain strong.

County debt levels are moderate, and amortization rates are above average. The fiscal years 2004-2008 capital improvement plan (CIP) for the county totals $2.9 billion, of which almost half will be funded through bond issuance. About two-thirds of the plan is for self-supporting aviation, port, and water and wastewater enterprises (revenue bonds rated 'AA' by Fitch). Following the issuance of $200M in GO bonds for parks and land preservation in fiscal 2005, officials do not expect to issue any additional general government debt.