Fitch Rates Hillsborough County Schools, Florida's $27MM Refunding COPs 'A+'.

Business Editors

NEW YORK--(BUSINESS WIRE)--Jan. 30, 2004

Fitch Ratings assigns an underlying 'A+' rating to the School Board of Hillsborough County, Florida's (the district) approximately $27.3 million refunding certificates of participation (COPs) (School Board of Hillsborough County, Florida Master Lease Program), series 2004A. The COPs, expected to be insured, are scheduled to price the week of Feb. 2 through negotiation led by UBS Financial Services and Citigroup and mature July 1, 2016-2017. Fitch also affirms the 'A+' underlying rating on the approximately $706 million outstanding COPs under the master lease program (prior to this refunding). The net present value savings on the refunded COPs is estimated to be a satisfactory 3%. The Rating Outlook is Stable.

The underlying 'A+' rating reflects the district's sound financial management, moderate debt burden (although slow debt repayment), significant but manageable capital needs, and the strong legal features of master lease-purchase agreements related to this issue, as well as all prior certificates. The district's susceptibility to state funding declines is somewhat mitigated by its continued success in controlling expenditures. Undesignated fund balance levels, after steadily increasing in recent years, more than doubled in fiscal 2003, bolstering reserve levels to a satisfactory level. Rapid enrollment growth and older building infrastructure will require continued substantial capital spending in the near term.

The COPs are secured by lease payments made by the district to the trustee, as assignee of the Hillsborough School Board Leasing Corp., which is a not-for-profit corporation created to assist the district in lease-purchase financing. The obligation of the district to make lease payments is a limited obligation, payable solely from funds appropriated by the district from available revenues. The 2004A COPs are being issued pursuant to a master lease agreement, which provides strong incentives for appropriation. In the event of non-appropriation, the board must surrender all leased facilities ...