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RHODE ISLAND'S $124.4 MILLION GOs RATED 'AA-' BY FITCH

 RHODE ISLAND'S $124.4 MILLION GOs RATED 'AA-' BY FITCH
 NEW YORK, July 27 /PRNewswire/ -- The State of Rhode Island's $124.4 million general obligation bonds, Consolidated Capital Development Loan of 1992, Series A, to be offered for bids on July 29, are rated 'AA-' by Fitch.
 The bonds will be due Aug. 1, 1993-2012, and at bidder's option, maturities in 2008-12 may be term bonds with mandatory sinking fund redemption. They will be initially callable on Aug. 1, 2001, at 102 percent. In conjunction with this rating request, the first made to Fitch by the state, the existing rating on $515.0 million general obligation bonds is removed from full general review and adjusted from 'AA' to 'AA-'. The credit trend is now viewed as stable.
 Rhode Island has a long record of financial responsibility, with demonstrated willingness and ability to respond to changing conditions, often as a result of vulnerability to business cycles. Its economy has undergone radical change over the past decade, with manufacturing employment falling over 20 percent but more than balanced by expansion in non-manufacturing, largely services. Rapid economic growth in the mid-to-late 1980's stopped suddenly in 1990, affecting the economy and financial operations. At the same time, several financial institutions faced crises, placing pressure on the state to intervene.
 Operations in the past three years have been characterized by the full use of reserves, available state and agency funds through transfers, expenditure reductions and tax increases. Participation in the workout for the financial institutions has greatly increased state tax supported debt, resulting in high debt ratios.
 Still, Rhode Island has preserved financial balance, has adopted a balanced budget for 1992-93, is rebuilding the reserve, and through an improved capital budget process has laid the foundation for near term control and eventual reduction of its debt burden. With the bank situation now under control and the budget reflecting current conditions, Rhode Island should be able to retain its credit strength, which has always reflected resilience to change, even though economic adjustment must continue.
 -0- 7/27/92
 /CONTACT: Claire G. Cohen, 212-908-0552, or Ruth Corson Maynard, 212-908-0596, both of Fitch/ CO: ST: Rhode Island IN: SU: RTG


TM -- NY111 -- 3711 07/27/92 17:32 EDT
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Publication:PR Newswire
Date:Jul 27, 1992
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