2008-08-04 23:36:03 -

- Fitch rates Greenville County, South Carolina's $10 million general obligation (GO) bonds, series 2008C 'AAA'. The bonds are scheduled to sell competitively on Sept. 9, 2008. Fitch also affirms the following:

-$66.1 million of outstanding GO bonds at 'AAA';

-$40.6 million of outstanding certificates of participations (COPS) at 'AA+';

-$35.7 million of outstanding hospitality tax COPS

at 'AA-'.

The Rating Outlook is Stable.

Greenville County's 'AAA' GO bond rating reflects its excellent fiscal management and planning, supported by strong reserves; low direct debt burden; and stable and diversifying economy. Maintenance of the current rating and Stable Outlook will hinge on officials' ability to manage growing operating costs and to preserve budgetary stability and financial flexibility.

Greenville County is located in northwestern South Carolina, along the Interstate 85 (I-85) corridor between Charlotte, NC and Atlanta. The county is a significant regional economic center with access to major health care service providers, three airports, and several colleges and universities. The manufacturing sector remains the major source of employment, although the economy has diversified away from textiles to durable goods. Foreign investment is considerable, with close to 80 international companies reportedly located in the county. Additionally, the county's housing market has exhibited relative stability despite the market softening which has occurred in other areas of the country. The county's unemployment rate for May 2008 remains below that of the state and nation, but county wealth levels, while historically high, are now approaching average.

The county's sound management is evidenced by its strong operations and multiyear financial forecasting. Historically, financial results have produced sizable operating surpluses and general fund unreserved balances that consistently exceeded 50% of spending. A large spike in pay-as-you-go capital expenditures for fiscal 2005 reduced unreserved fund balance levels to 35% of spending. Unaudited results for fiscal 2008 show a small general fund surplus of approximately $1 million increasing reserves to $41 million. Unreserved fund balance levels remain steady at 35%.

Although a multiyear financial plan indicates adherence to the county's policy of maintaining the general fund's undesignated fund balance above 25% of estimated annual recurring revenues, strong reserve levels remain a source of financial flexibility and salary hikes are expected to raise pay levels to those competitive with other South Carolina communities.

Direct debt levels are low and are expected to remain modest. The debt service burden remains manageable and is mitigated by the rapid principal amortization rate. Overall debt ratios are above average, reflecting a large capital improvement program (CIP) by the Greenville County School District. Although overall debt is above average for the rating category, the school construction program should enhance the county's economic growth prospects.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

Fitch Ratings, New York
Rachel A. Barkley, 212-908-0514
Amy R. Laskey, 212-908-0568
or
Media Relations:
Cindy Stoller, 212-908-0526