Fitch Rates Montgomery County Revenue Authority, Maryland's $20.9MM Lease Revs 'AA+'.

Business Editors

WASHINGTON--(BUSINESS WIRE)--March 26, 2004

Fitch Ratings assigns an 'AA+' rating to the Montgomery County Revenue Authority, MD's (MCRA) $20.9 million lease revenue bonds (Germantown Indoor Swim Center Project), series 2004A. The offering is scheduled for a competitive sale on Mar. 30. The Rating Outlook is Stable.

The 'AA+' rating reflects the sound lease provisions, supported by Montgomery County's (the county) solid credit fundamentals. The county (general obligation bonds rated 'AAA' by Fitch) has a broad and diverse economy, enhanced by the U.S. government's extensive presence and residual expansion of the information and biotechnology industries, strong fiscal management, and a manageable debt levels that is rapidly retired. Another factor supporting the strong lease rating is a county recreation tax levied for operations and debt service related to county recreation department projects. While not pledged to bondholders, the tax nevertheless provides identifiable resources for repayment.

The bonds will be used to finance a public indoor swim center to be located in Germantown. The Maryland-National Capital Park and Planning Commission (M-NCPPC) owns the land, which is to be leased to MCRA for twenty years. The MCRA will issue the bonds and lease the site and the project to the county for fifteen years, in exchange for lease rental payments paid by the county. MCRA assigns its rights to rental payments from the county to the bond trustee (Wachovia Bank National Association), who may re-let or sell the county's leasehold interest in the project if the county fails to appropriate. Lease rental payments are due on March 20 and Sept. 20, prior to debt service payments of April 1 and Oct. 1.

The county is responsible for all operating costs of the aquatic facility project. The lease rental payments are not subject to abatement or reduction and the county executive covenants to include the funds necessary to pay the lease rental payments in the budget that is submitted to the county council.

MCRA, which is governed by a five-member board appointed by the county executive with approval from the county council, has financed several successful enterprise operations of the county.

Germantown, which is a growing area of the county, is located in the southwestern portion of the county just off of I-270. This is the first indoor swim facility located in this area of the county. The project, totaling about 60,000 gross square feet, will include a free form leisure pool, a 25-meter competitions pool with a diving tower and a 200-foot water slide, and two hydrotherapy pools. The project will also include administrative offices, multi-purpose instruction rooms, and locker/shower rooms.