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AUSTIN, TEXAS PUBLIC IMPROVEMENT BONDS RATED 'AA' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Feb. 3 /PRNewswire/ -- Austin, (Texas)'s $71.6 million Public Improvement Refunding Bonds, Series 1993 are rated 'AA' by Fitch. The bonds were priced yesterday by a syndicate led by Merrill Lynch & Co. The credit trend is stable. Bond proceeds will be used to refund certain maturities of the city's series 1985, 1986, 1988, 1989, 1990B, and 1990C bonds.
 Austin's credit strength lies in the economic importance of the state capital and the University of Texas, and the stability each provides, as well as recent evidence of economic recovery. Despite the national recession, Austin's economy continues to grow. Nearly all economic indicators have recovered fully from a downturn in the mid-to late-1980s. Monthly data through October 1992 suggests a fourth year of job growth, with employment increasing close to 2 percent. The unemployment rate was 4.5 percent in October, below that of October 1991, and well under state and U.S. averages. Retail trade activity improved significantly as well, with 1992 marking a fifth year of positive growth, following two years of declines.
 Austin's real estate market, the slowest area to recover, also is showing signs of improvement. Office vacancy rates in the downtown area fell to 20 percent in 1991 and 15 percent in the third quarter of 1992, down from a 34 percent peak. Home sales activity increased in 1992 for the sixth consecutive year, and the average home price rose significantly, and now is just 2 percent below the 1986 high. The city's total taxable property base recently experienced its first net gain in several years, albeit small, and another positive year is expected for 1994. The Bergstrom Air Force Base closing underway is likely to have a dampening, although not dramatic, effect.
 The city's financial operations continue to be strong. Unaudited results for the general fund in fiscal 1992 indicate a small operating surplus, increasing the ending fund balance to $24.3 million, a very sound 10.5 percent of expenditures. The 1993 budget includes a tax rate increase and is balanced using a small amount of the beginning fund balance. The ending balance will meet the city's 6 percent of expenditures ordinance.
 Austin's overall debt levels are high, with debt service expense representing nearly 19 percent of the operating budget. Property tax- supported future issuance will be held to $25 million annually, as has been the practice historically.
 -0- 2/3/93
 /CONTACT: Amy S. Doppelt of Fitch, 212-908-0514/


CO: ST: Texas IN: SU: RTG

LD -- NY081 -- 2571 02/03/93 16:24 EST
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Date:Feb 3, 1993
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