Fitch Rates New Jersey EDA's $18.1MM Lafayette Yard Bonds 'A+'.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch assigns an 'A+' rating to the New Jersey Economic Development Authority's approximately $18.1 million taxable economic development bonds series 2007 Lafayette Yard Hotel Project bonds. The bonds are expected to sell by negotiation March 21, 2007 by Bear Stearns The Bear Stearns Companies, Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., one of the largest global investment banks and securities trading and brokerage firms in the world. & CO. Inc. The bonds are due April 1, 2009-2027. Other details will be determined upon final negotiation. The Rating outlook is Stable. The 'A+' rating reflects the State of New Jersey's ability to service state-appropriation debt. The bonds are issued under an authorization not to exceed $19 million and are payable solely from pledged revenues under a state sublease sublease n. the lease of all or a portion of premises by a tenant who has leased the premises from the owner. A sublease may be prohibited by the original lease, or require written permission from the owner. subject to annual legislative appropriation. Pledged revenues are derived from payments made by the City of Trenton on a bond it will issue to the authority as part of this financing. The source of city payments derive solely from the city assignment of state sublease payments. The sublease payments are equal to the payment in lieu of Instead of; in place of; in substitution of. It does not mean in addition to. taxes (PILOTs) on the state office building leased by the state. To assist the Lafayette Yard hotel project, the state has been appropriating the PILOT payments since 2005 in addition to regular lease payments. Supplemental amendments to the lease provide for PILOT payment to be met in the event of lease termination, damage or destruction. The EDA (1) (Electronic Design Automation) Using the computer to design, lay out, verify and simulate the performance of electronic circuits on a chip or printed circuit board. bonds now sold will refund a portion of city of Trenton guaranteed bonds Guaranteed Bond A type of bond in which the interest and principal on the bond are guaranteed to be paid by a firm other than the issuer of the bond. Notes: This guarantee limits the impact on bondholders if the issuer of the bond goes into default. for the Lafayette Yard Community Development Corporation and pay debt service due April 1, 2007, Oct. 1, 2007 and April 1, 2008. Since security for the bonds rests solely on the annual appropriations to be made by the state, the "A+" rating reflects the general creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. of the state. Fitch rates general obligation debt of the state of New Jersey 'AA-' reflecting the state's high wealth levels (the second highest of the states) and a broad and diverse economy. The state's economic strengths have been offset by a high debt burden and spending pressures. Important to the direction of credit quality is sustained economic and revenue performance as the state takes on property tax relief in the face of on-going pressures. Spending pressures arises from property tax relief and infrastructure needs, rising expenses for pension, employee benefits, and rising debt service due to capital needs for school construction and transportation. The state's debt burden, high at close to 8% of personal income, is rising due to ongoing capital demands. Spending pressures have led to the use of non-recurring revenues to address structural gaps of over 7% of revenues. Non-recurring sources equal to 5% of revenues are recommended in the $33.3 billion fiscal 2008 executive budget, eroding strides to reduce their use in the current year. The recommended fiscal 2008 budget incorporates some task force reforms, including funding a state controller and pension changes for new hires. Under consideration is the use of proceeds from asset sales to reduce debt service, enabling increased funding for other state needs. Revenue estimates for fiscal 2007 have been revised upward and rely on rapid growth of major taxes, rising 7.6% on a budgetary basis. Gross income taxes are projected to rise a robust 9.1% from fiscal 2006 with sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. rising 27%, reflecting the 1% increase in the tax to 7% to finance property tax relief. The corporation business tax receipts are projected to decline 9.9% largely due to the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. carry-forward provisions. Further budget balancing may be required as the legislative revenue estimates are projected to be $653 million below the executive estimates over the next two years. Non-farm employment in 2006 rose 0.9% from the prior year against 2% gain for the nation. January 2007 employment rose 0.9% from a year earlier compared to 1.6% recorded in the U.S. Personal income in the state rose 6.3% in the third quarter of 2006, continuing the state trend of rising above regional rates but remaining largely below the nation. 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