Fitch Rates Monmouth County Improv Auth, NJ $22.86MM Guaranteed Revs 'AAA'.

NEW YORK -- Fitch Ratings assigns an 'AAA' rating to the Monmouth County Improvement Authority, New Jersey's (MCIA) $22,860,000 county guaranteed governmental loan refunding revenue bonds, series 2006. The bonds are scheduled to price via negotiation on or about Feb. 14 with Raymond James, Inc. as lead underwriter. The bonds will mature serially with semiannual interest and principal payments on Feb. 1 and Aug. 1, commencing Aug. 1, 2006. Bond proceeds, along with other available funds, will currently refund the MCIA's outstanding series 1986 bonds. At this time, Fitch affirms the 'AAA' ratings on MCIA's $47.5 million outstanding county-guaranteed bonds and Monmouth County's (the county) approximately $273 million outstanding GO bonds. The Rating Outlook is Stable.

The 'AAA' rating reflects the county's solid financial management resulting in continued strong operations and financial flexibility, stable growth in its wealthy tax base, and low direct debt levels with rapid amortization. The county continues to experience positive employment growth and unemployment levels are well below the state average. Fund balances continued to grow in 2005 due to the county's conservative budget practices, expenditure controls, and healthy flow of revenue driven by an expanding property tax base. The county's capital plan has grown but remains affordable, and although primarily bond-funded, debt levels should remain moderate given the county's conservative policies including rapid amortization rates.

The series 2006 bonds are being issued pursuant to the MCIA's 2006 governmental loan refunding revenue bond resolution. The primary security on the bonds is provided in the form of an unconditional, irrevocable guaranty of the county. Pursuant to the county guaranty agreement, the MCIA must notify the county if there is a debt service fund deficiency on the 15th day of the month preceding the month debt service is due. The county is then obligated to take all necessary actions to provide funds to make the debt service payment in full.

The county is located along the northern Atlantic shore of New Jersey, 50 miles outside New York City. The 2000 census revealed an 11.3% population increase over that of 1990, and the 2004 estimate of 636,298 exceeded state growth trends. While still concentrated in health care and retail, employment is diversifying with significant gains in the construction and finance sectors. The county's wealthy property tax base has expanded steadily and remains primarily residential at 80%. The equalized value (EV) of property grew a strong 12.3% on average from 2002-2006. Income levels remain strong and are further demonstrated in the county's high market value per capita of $164,703 in 2005, up 19% since 2004. The county's unemployment rate of 3.8% in November 2005 remains below the state and national averages of 4.4% and 5.0%, respectively. Of recent note is the recommended closure of Fort Monmouth by the Federal Base Realignment and Closure Commission. Fitch believes the county's ability to withstand the base closure is strong as the economy is deeply diversified providing opportunities for the highly skilled displaced employees. The 5,500 civilians employed at the base represent a relatively small portion of the county's overall labor force, which totaled 333,444 in 2005.

The county's financial position is strong. The 2005 unaudited unreserved fund balance was $85.2 million, or 18.6% of expenditures. Overall, fund balances over the past five years have increased 6.8% on an average annual basis, supported by conservative budgeting and effective expenditure controls. The strong housing market has augmented revenues in the current fund, somewhat offsetting budget stress related to rising insurance and pension costs.

The county's direct debt burden is low at $428 per capita and 0.26% of EV). Debt levels are more moderate, on an overall basis, with debt per capita at $2,763 and 1.68% of EV. Pursuant to county resolution, debt is amortized very rapidly, providing ample capacity in future years for continued capital investment. Amortization rates are comfortably above the 70% policy with over 91% retired in 10 years. Series 2006 bond proceeds will provide funding for loans to 12 municipalities, four boards of education, and two sewerage authorities in Monmouth County.

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