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MOODY'S ASSIGNS 'MIG 1' RATING TO RIVERSIDE COUNTY, CALIF.'S SALE OF $200 MILLION TAX AND REVENUE ANTICIPATION NOTE

 MOODY'S ASSIGNS 'MIG 1' RATING TO RIVERSIDE COUNTY, CALIF.'S
 SALE OF $200 MILLION TAX AND REVENUE ANTICIPATION NOTE
 NEW YORK, June 19 /PRNewswire/ -- Effective yesterday, Moody's has assigned a "MIG 1" rating to Riverside County, Calif.'s annual cash flow borrowing, citing the availability of ample liquidity and the strong legal provisions for note repayment.
 The highest grade rating for short-term debt was based on the availability of a stable source of substantial funds for interfund borrowing in the event of a general fund shortfall. Strong legal provisions include the advanced segregation of note repayment funds in January, May and June 1993, in advance of the June 30, 1993, note due date. While segregation features are typical of California note transactions, the additional provision requiring the county to deposit funds for note repayment from alternate sources if General Fund sources are insufficient by the 20th day of each of the segregation months is unusually strong and offers strong security in light of the county's unrestricted resources held in funds outside of the General Fund.
 While the county's liquidity provides the highest level of protection for note investors, Moody's also noted a number of credit concerns, including the county's exceptionally narrow projected general fund cash margins which rely on temporary interfund borrowings to bridge fiscal year deficits and the sharp erosion of general fund reserves. Located east of major economic centers in Los Angeles and Orange County, the county experienced strong residential construction and related tax base growth during the 1980s. The recession has resulted in sharply reduced levels of construction, slower growth in the property tax base, and sharp declines in economically sensitive discretionary revenues such as the sales tax. The county's proposed budget calls for layoffs and other expenditure reductions, and still fails to provide for all anticipated expenditures. The county's budgetary measures are overshadowed, however, by the uncertainty due to the lack of a state budget in light of the county's dependency on state funding.
 -0- 6/19/92
 /CONTACT: Nikolai J. Sklaroff, 415-274-1741; Mark Campa, 415-274-1711; or Barbara J. Flickinger, 212-553-7736, all of Moody's/ CO: Riverside County ST: California IN: SU: RTG


GK-TQ -- NY029 -- 1893 06/19/92 11:43 EDT
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Publication:PR Newswire
Date:Jun 19, 1992
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