Fitch to Confirm Mississippi Taxable VR GOs (Nissan North America, Inc. Proj) 2003B at 'F1+'.

NEW YORK -- Effective Nov. 18, 2009 Fitch Ratings will confirm the short-term component of 'AA/F1+' rating currently assigned to the $49,995,000 State of Mississippi taxable variable rate general obligation bonds (Nissan North America, Inc. Project), series 2003B (the bonds).

The rating action is in connection with the substitution of the current standby bond purchase agreement (SBPA) issued by Dexia Credit Local which provides liquidity for the bonds, with a SBPA issued by Bank of America N.A, (BofA). On Nov. 18, 2009, the short-term rating on the bonds will be confirmed at 'F1+' based on the BofA SBPA. The short-term rating for the bonds will expire upon the earliest of: Nov. 18, 2010 the stated expiration date of the SBPA or any prior termination of the SBPA. The long-term 'AA' component of the rating continues to be based on the long-term rating assigned by Fitch to the general obligation (GO) bonds of the State of Mississippi. Morgan Stanley is the remarketing agent of the bonds.

The State of Mississippi's long-term 'AA' rating reflects the state's solid reserve levels, diversifying economy, and historically conservative borrowing and financial practices tempered by low wealth and education levels.

Mississippi experienced employment growth in the first half of 2008, though a reversal mid-year led to an annual decline of 0.5%, slightly worse than the national decline of 0.4%. September 2009 employment was down 3.5% statewide from the prior year, with the losses led by the dominant manufacturing sector. State unemployment in September 2009 was 9.2%, up significantly from 7.4% one year prior. Income growth has exceeded national growth levels in 2007 and 2008; however, per capita personal income in 2008 of $30,399 is just 76% of the U.S. level, ranking Mississippi 50th among the states.

The adopted fiscal 2010 budget, exclusive of federal stimulus monies, is 5.3% below fiscal 2009 appropriations and a $65 million Working Cash-Stabilization Fund withdrawal is planned. Fiscal 2010 revenue performance through Oct. 31, 2009 was $112 million, or nearly 8%, below expectations. To date, the governor has proactively implemented $172 million in spending cuts since the start of the fiscal year to maintain fiscal balance. The state's Working Cash-Stabilization Fund, which in recent years had approached goal levels, despite withdrawals is expected to hold $245 million at the close of fiscal 2010, representing 5% of fiscal 2010 general fund expenditures. Fitch notes that the state has suspended its 98% budgeting policy in fiscal years 2008, 2009 and 2010.

The state's net tax supported debt of approximately $4.6 billion, represents a moderate but above average burden on resources at 5.2% of 2008 personal income and $1,572 per capita. Debt is largely GO and amortization is above average, with 74% of GO debt to be retired in 10 years.

Additional information is available at www.fitchratings.com.

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