Fitch Rates Hennepin County, MN Third-Lien Sales Tax Revs , Ser 2008C 'AA-/F1+'

Business Wire,  June 24, 2008  

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NEW YORK -- Fitch Ratings assigns an 'AA-' long-term and an 'F1+' short-term rating to the $75,000,000 Hennepin County, MN third-lien variable rate sales tax revenue bonds (Ballpark Project) series 2008C.

Fitch also affirms its ratings on the following outstanding county bonds:

--Approximately $513 million general obligation bonds at 'AAA';

--$150 million first-lien sales tax revenue bonds at 'AA+';

--$120 million second-lien sales tax revenue bonds at 'AA'.

The Rating Outlook for all of the bonds is Stable.

The long-term 'AA-' rating assigned to the bonds is based on the county's diverse and expanding economic base, steady growth in retail sales and related sales tax receipts, lack of exposure to stadium operating risk in the security structure, sound projected coverage of annual debt service payments, and the subordinate nature of the third-lien pledge. Additionally, the county's financial liability is capped by state legislation at $350 million, with the Minnesota Twins baseball team contributing at least $167.4 million and responsible for any cost overruns.

The short-term 'F1+' rating on the bonds is based on the liquidity support of the standby bond purchase agreement (SBPA) provided by U.S. Bank, National Association. The SBPA provides for the payment of the principal component of purchase price and up to 36 days of interest calculated at a maximum rate of 10% per annum based on a year of 365 days. The SBPA will expire on June 26, 2011, unless extended or earlier terminated pursuant to its terms. The remarketing agent for the bonds is Wells Fargo Brokerage Services, LLC. The bonds are expected to be delivered on or about June 26, 2008.

The bonds initially bear interest in the weekly rate mode, but may be converted to bear interest at the fixed rate mode. While the bonds bear interest at the weekly rate mode, interest is payable on the first business day of each month, commencing July 1, 2008. Holders of bonds bearing interest at a weekly rate may tender their bonds for purchase with prior notice. The SBPA covers the bonds while they are in the weekly rate mode.

The bonds are subject to a mandatory tender upon conversion of the interest rate mode, upon the expiration or substitution of the SBPA, and upon the occurrence of certain events of default under the SBPA. The bonds are also subject to optional and mandatory sinking fund redemption.

The proceeds of the bonds will be used to finance a portion of the cost of site acquisition, site improvements, and other activities necessary to prepare a site for development of a ballpark, to construct and improve the ballpark, and to acquire and construct public infrastructure related to the ballpark.

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.

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