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08/0'9/2002 :].4:19 ET REF: Cabarru. s County NOOD7193.0000 FR:#OODYS T0:7049202881 P~ge I of 4 MOODY'S ASSIGNS Aa3 RATING TO CABARRUS COUNTY, NORTH CAROLINA'S SERIES 2002 CERTIFICATES OF PARTICIPATION $26.5 MILLION IN DEBT AFFECTED Cabarrus (County of) NC County North Carolina Moody's Rating Issue Rating Series 2002 Certificates of Participation Aa3 Sale Amount $26,500,000 Expected Sale Date 08/19/02 Rating Description Certificates of Participation NEW YORK, August 9, 2002 -- Moody's Investors Service' has assigned an Aa3 rating to Cabarru8 County's (NC) $26.5 million in Certificates of PartiCipation, Series 2002. The rating is based on a lease agreement, which requires that the county make annual payments appropriated from general county revenues. Also' considered in this rating is the essential nature of a portion of the financed assets cross-collateralized with a $20 million Expo Center that mitigate the risk of non-appropriation as failure to appropriate for one project results in loss of access to all financed facilities. Finally, the rating incorporates the county's favorable long-term credit characteristics which include a growing and diversifying economy, strong financial performance expected to remain solid in the face of state budget cuts and slowed sales tax revenues, and a manageable debt position. Moody's maintains a Aa2 rating on the county's outstanding general obligation debt. SATISFACTORY LEGAL PROVISIONS; NON-ESSENTIAL PROJECT CROSS-COLLATERALIZED WITH ESSENTIAL PROJECTS MITIGATES NON-A~PROPRIATION RISK The bonds are secured by the county's annual budget appropriations to make payments to the trustee sufficient for debt service.requirements for the duration of the agreement as well as a security interest in all financed projects. The current offering will finance the construction of a county Expo Center ($20 million), the addition of gymnasiums to several existing school facilities ($2.5 million) and the construction of a new school administration building ($4 million)..While the Expo Center, a multi-purpose events center expected to house the county fair, concerts and other local events, the project for which the majority of these funds will be used, is not essential to county operations, this project is cross-collateralized with the county's school improvements, facilities essential to county operations, the addition of which serve to mitigate the risk of non-appropriation. RAPIDLY GROWING COUNTY BENEFITS FROM LOCATION WITHIN CHARLOTTE MSA Moody's expects the county's rapidly-growing economy to continue to thrive given considerable tax base growth, an increasingly diversified industrial sector, and continued commercial growth. Located 20 miles northeast of downtown Charlotte (GO bonds rated Aaa) and along 1-85, Cabarrus County derives strength from its location within the economically-robust Charlotte Metropolitan Statistical Area (MSA). Residential, commercial, and industrial development, particularly on the western side of the county, has resulted in