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Moody's Investors Service <br /> G~obal C~*edit Research <br /> <br />Municipal Credit Research <br /> New Issue <br /> Published 23 Jun 2003 <br /> <br />Cabarrus (County of) NC <br /> <br />Contacts <br /> <br />Rebecca Blackmon Joyner <br />Patrick Mispagel <br /> <br />212-553-4425 <br />212-553-7463 <br /> <br />Moody's Rating <br /> <br /> Issue <br /> <br />Rating <br /> <br />Certificates of Participation, Series 2003 <br /> Sale Amount $40,055,000 <br /> Expected Sale Date 07/24/03 <br /> Rating Description Certificates of Participation <br /> <br />Aa3 <br /> <br />MOODY'S ASSIGNS Aa3 RATING TO CABARRUS COUNTY (NC) $40.055 MILLION <br />SERIES 2003 CERTIFICATES OF PARTICIPATION <br /> <br />AFFIRMS Aa2 RATING ON GENERAL OBLIGATION BONDS AFFECTING <br />APPROXIMATELY $56 MILLION IN DEBT <br /> <br />Opinion <br /> <br /> Moody's Investors Service has assigned a Aa3 rating to Cabarrus County's (NC) $40.055 <br /> million in Certificates of Participation, Series 2003. The rating is based on a lease <br /> agreement, which requires that the county make annual payments appropriated from <br /> general county revenues. Additionally, the cerbficates are backed by a first lien on all <br /> financed assets, including three new school facilibes and improvements to two existing <br /> schools. Also considered in this rating is the essential nature of the financed assets, <br /> which mitigates the risk of non-appropriation as failure to appropriate would result in loss <br /> of access to all pledged facilities. Finally, the rating incorporates the county's favorable <br /> long-term credit characteristics which include a growing and increasingly diverse area <br /> economy that mitigates the risks associated with some remaining vulnerable industry; <br /> strong financial performance expected to remain solid in the face of state budget cuts and <br /> slowed sales tax revenues; and a manageable debt position. At this brae, Moody's has <br /> also affirmed the Aa2 rating on the county's outstanding general obligation debt. <br /> <br /> RAPIDLY GROWING COUNTY BENEFITS FROM LOCATION WITHIN CHARLOTTE <br /> MSA; INCREASINGLY DIVERSE ECONOMY OFFSETS RISKS FROM PHILLIP <br /> MORRIS, PILLOWTEX AND CORNING <br /> <br /> Moody's expects the county's rapidly-growing economy to continue to thrive given <br /> considerable tax base growth, an increasingly diversified industrial sector, and continued <br /> commercial growth. Located 20 miles northeast of downtown Charlotte (GO bonds rated <br /> Aaa) and along 1-85, Cabarrus County derives strength from ~ts location within the <br /> economically-robust Charlotte Metropolitan Stabstical Area (MSA). Residential, <br /> commercial, and industrial development, particularly on the western s~de of the county, <br /> <br /> <br />