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RHODE ISLAND $225 MIL. TAX ANTICIPATION NOTES RATED 'F-1+' BY FITCH -- FITCH FINANCIAL WIRE --

RHODE ISLAND $225 MIL. TAX ANTICIPATION NOTES RATED 'F-1+' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, June 26 /PRNewswire/ -- Rhode Island's $225 million general obligation tax anticipation notes, expected on June 29 through negotiation with a syndicate led by Merrill Lynch & Co., are rated 'F-1+' by Fitch. The notes will be dated July 1, 1992, are due June 30, 1993 and are not callable. They will be in two series: $100 million Series 1 and $125 million Series 2; Series 2 is expected to be secured by a letter of credit issued by a financial institution.
 The notes, general obligations to which the state's full faith and credit are pledged, are issued in anticipation of taxes to be collected during 1992-93. The security rests on the state's ability to keep its expenditures within available revenues, since there are no significant other funds from which to borrow. The budget is not yet adopted, but it is anticipated that almost $15 million will be appropriated to the budget reserve fund, bringing its balance to about $23 million by June 30, 1993. Revenue estimates appear reasonable, based on economic recovery beginning in the second half of 1992.
 Cash flow projections indicate that balances would be negative, without the current borrowing, in each month until June 1993. The closing cash balance is estimated at about $30 million, leaving a safety margin of only a little more than 1 percent. The notes represent a moderate 10 percent of cash flow and are equal to 60 percent of the legal limit and to 80 percent of the legislative authorization of $275 million.
 Rhode Island has never engaged in deficit financing and has maintained positive, although minimal, balances through the current, severe recession period. The state has a successful record of making timely spending cuts and adjustments, now aided by procedural improvements such as a quarterly allotment process and consensus revenue estimating. Pursuant to statutory requirement, the budget reserve is being restored.
 -0- 6/25/92
 /CONTACT: Claire G. Cohen, 212-908-0552, or Ruth Corson Maynard, 212-908-0596, both of Fitch/ CO: Rhode Island ST: Rhode Island IN: SU: RTG


AH -- NY043 -- 4240 06/26/92 13:14 EDT
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Publication:PR Newswire
Date:Jun 26, 1992
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