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MARYLAND LOCAL GOVERNMENT INSURANCE TRUST RATED 'AA-' BY FITCH -- FITCH FINANCIAL WIRE --

 MARYLAND LOCAL GOVERNMENT INSURANCE TRUST RATED 'AA-' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, July 9 /PRNewswire/ -- Maryland Local Government Insurance Trust's $18.5 million unlimited tax full faith and credit obligations (Self-Insurance Liability Funding Program) Series 1992 of Prince George's County, Maryland, are rated 'AA-' by Fitch. The obligations are being offered through negotiation by a syndicate led by Legg Mason Wood Walker, Inc. on or about July 14. The obligations mature serially on Aug. 1, 1993-2007, with a $6.855 million term obligation due Aug. 1, 2012. The obligations are subject to optional prepayment or mandatory tender for purchase at the option of the county on or after Aug. 1, 2002 at 102 percent and declining thereafter. However, the county, using an instrument called Transferable Underlying Call Options (TUCOs), may offer to sell its right of mandatory tender for purchase to obligation holders or third parties. The purchaser then has the option to tender the applicable obligation, while the county forfeits its rights of optional prepayment or mandatory tender for purchase of the same obligations.
 The obligations are payable from premium payments made by Prince George's County backed by its full faith and credit and unlimited taxing power. The payments and the right to enforce payment are fully assigned by the Local Government Insurance Trust (LGIT) to holders of the obligations; the county as registrar and paying agent will make payments directly to owners. The county has been able to maintain deficit reduction targets in the fiscal year just ended despite mid-year revenue shortfalls caused by state aid cuts and the prolonged recession. Direct state aid was cut further in the 1993 budget, although education aid was restored and increased. While significant one-time measures were required to reach the target last fiscal year, the 1993 budget and multi-year financial plan entail permanent measures and exceed the original deficit reduction targets. Permanent measures include an income tax increase, payroll levels and service reductions, and renegotiated salary increases. Own-source revenues are realistically forecasted, although state aid appears at risk again as new state budget shortfalls have been revealed.
 Debt factors are positive, with low levels and rapid principal amortization. While the recession affected real estate values in the Washington, D.C. metropolitan area, the effect has been less severe in Prince George's County, with the real estate market recently showing improvement. However, the timing of overall area economic recovery is still in question. Long-term economic growth trends and prospects are favorable. The credit trend of the county is changed to stabilizing from declining. While additional state budget shortfalls have again emerged, the county has budgeted own-source revenues prudently and demonstrated its ability to make adjustments and take difficult measures to maintain its deficit reduction targets.
 -0- 7/9/92
 /CONTACT: Richard Raphael of Fitch, 212-908-0506/ CO: Maryland Local Government Insurance Trust ST: Maryland IN: INS SU: RTG


LD -- NY088 -- 8072 07/09/92 18:01 EDT
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Publication:PR Newswire
Date:Jul 9, 1992
Words:486
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