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Summary: <br />Cabarrus County, North Carolina; <br />Appropriations <br />US$22.72 mil rfdg ltd oblig bnds ser 2011 C due 02/01/2012 -2024 <br />Long Term Rating AA /Stable New <br />US$11.975 mil rfdg ltd oblig bnds ser 2011 B due 02/01/2012 -2022 <br />Long Term Rating AA /Stable New <br />Cabarrus Cnty ltd oblig <br />Long Term Rating NR <br />Rationale <br />Standard & Poor's Ratings Services assigned its 'AA' long -term rating and stable outlook to Cabarrus County, <br />N.C.'s series 2011B and 2011C refunding limited - obligation bonds, and affirmed its 'AA' long -term rating and <br />underlying rating (SPUR), with a stable outlook, on the county's existing appropriation debt. In addition, we <br />withdrew 'AA' rating on the series 2010B and 2010C limited - obligation bonds as these bonds never sold. The series <br />2011B and 2011C issues will replace them. <br />Standard & Poor's also affirmed its 'AA +' long -term rating and SPUR, with a stable outlook, on the county's <br />existing general obligation (GO) debt. <br />The 'AA' rating reflects: <br />• Cabarrus County's general creditworthiness, as lessee; <br />• Solid security provided by an installment- purchase contract; <br />• The county's commitment in repaying its appropriation- backed obligations; and <br />• Strong oversight, provided by the Local Government Commission. <br />Officials plan to use bond proceeds to advance refund a portion of the county's series 2002 and 2003 certificates of <br />participation. <br />Installment payments made by the county to Cabarrus County Development Corp., pursuant to the <br />installment- financing contracts dated Aug. 15, 2002, and July 15, 2003, and amended on May 1, 2011, secure the <br />limited - obligation bonds. The respective deed of trust agreements executed and delivered to the deed of trust trustee <br />for the corporation's benefit provide additional certificate security. The deed of trusts grant a lien on the real <br />properties on which the schools are located. The corporation has assigned all of its rights in the deed of trusts to the <br />trustee pursuant to the respective trust agreements. As stated in the installment - purchase contracts, the county <br />budget officer is required to include installment payments for the certificates in the budget. There is no abatement of <br />the installment payments. The county is responsible for all taxes, operations and maintenance, and insurance. The <br />contracts constitute a triple -net lease with no right to set off or counterclaim. <br />Standard & Poor's I RatingsDirect on the Global Credit Portal I May 31, 2011 <br />1 -1 <br />Attachment nu�ber 2 <br />869606 300056781 <br />Page 51 <br />