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MICHIGAN STATE BUILDING AUTHORITY REVENUE BONDS RATED 'AA-' BY FITCH -- FITCH FINANCIAL WIRE --

MICHIGAN STATE BUILDING AUTHORITY REVENUE BONDS RATED 'AA-' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, July 30 /PRNewswire/ -- Michigan State Building Authority's approximately $200 million 1992 Revenue Bonds, Series I are rated 'AA-' by Fitch. The bonds are expected to be priced on or about Aug. 5. The bonds will be secured by a single pool of leases payable by the State of Michigan. The rating reflects the state's general creditworthiness, strong legal provisions in the underlying lease obligations of the state, and overall state support of the authority.
 Lease provisions are excellent, with rental payments appropriated directly by the state legislature constituting ongoing contractual obligations. The key role that the building authority assumes in the state's capital financing is also a positive factor. About half of state debt is attributable to the authority.
 The state's general obligation bonds are rated 'AA' and overall state tax-supported debt of $2.9 billion places a low burden on resources, with ratios of $312 per capita and 1.7 percent of personal income. State financial operations have been adversely affected by the recession and the 1991-92 budget has been re-balanced through the use of reserves, non-recurring items, and expenditure reductions. The budget for 1992-93, which begins on Oct. 1, has been adopted and is essentially in balance. Recent trends in employment and personal income suggest that the economy has begun to stabilize.
 The primary strength of the leases is a provision which contractually obligates the state to make rental payments for the entire term of the bonds. A debt service reserve fund, equal to 25 percent of maximum annual debt service, is provided from proceeds.
 -0- 7/30/92
 /CONTACT: Richard Raphael, 212-908-0506, or Claire Cohen, 212-908-0552, both of Fitch/ CO: Michigan State Building Authority ST: Michigan IN: SU: RTG


SH -- NY094 -- 5244 07/30/92 15:53 EDT
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Publication:PR Newswire
Date:Jul 30, 1992
Words:306
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