Rutherford County North Carolina

Fitch Rates Rutherford County, NC LOBs 'A+'; Affirms GOs at 'AA-'

Jun. 7, 2011 (Business Wire) -- Fitch Ratings assigns an 'A+' rating to the following Rutherford County, North Carolina (the county) bonds:

--$19.82 million limited obligation bonds (LOBs), series 2011.

The bonds are expected to sell via negotiation on June 16.

In addition, Fitch affirms the 'AA-' rating on the county's outstanding $7 million general obligation (GO) bonds and the 'A+' rating on the outstanding $36.2 million certificates of participation (COPs).

The Rating Outlook is Stable.

RATING RATIONALE:

--The county's debt levels are low, and amortization of principal is above-average.

--Despite recent planned general fund balance drawdowns, the county has a solid financial position evidenced by sound reserve levels.

--The county's economy is limited and remains somewhat concentrated in textile manufacturing, resulting in high unemployment and modest tax base growth.

--County wealth levels are below-average relative to state and national levels.

--The LOBs contain solid legal provisions, are secured by a lien on essential county property, and are subject to annual appropriation.

KEY RATING DRIVERS:

--Efforts to encourage economic development and diversification are key in light of recent economic weakness and although decreasing, above average unemployment.

--Continued prudent financial management and maintenance of sound financial margins.

SECURITY:

The COPS and LOBs evidence a proportionate and undivided interest in rights to receive certain payments pursuant to an Installment Financing Contract between the county and the Rutherford County Public Facilities Company. The county has executed and delivered a deed of trust, granting funds appropriated for payment by the county of principal and interest on the associated bonds and a lien on the mortgaged property subject to permitted encumbrances. Mortgaged property conveyed under the deed of trust includes three schools, whose essentiality provides sufficient incentive to appropriate.

The GO bonds are general obligations of the county, secured by its full faith and credit pledge.

CREDIT SUMMARY:

Rutherford County is located in the Blue Ridge Mountains in western North Carolina, about 70 miles west of Charlotte. Its population has remained relatively flat this decade, in contrast to the moderate 10.5% growth of the 1990s. While the county's economy remains concentrated in manufacturing and is therefore somewhat vulnerable during periods of economic softening, efforts have been made to diversify the employment and tax bases. Job and tax base losses over the past few years have been offset by similarly sized gains, with relatively little net change.

Facebook funds grants program in NC, data center subcontractors ...

A new Facebook-funded grants program will distribute up to $200,000 in awards this year to eligible nonprofits in Rutherford County, NC, where the social networking company is building a data center.

The Facebook-Rutherford Community Action Grants will use funds set aside as part of an agreement between the company and the county to bolster community nonprofits based on the recommendations of a formal grants committee made up of Facebook representatives and local leaders.

“Facebook is committed to playing a positive role in Rutherford County and all the communities where we operate,” said George Henry, manager of the $450 million data center going up just outside Forest City.  “We work globally, but live locally — and we want our larger success to help strengthen our hometowns.”

A committee will review funding requests by local 501c3 organizations, schools, and colleges that meet the eligibility guidelines described at a new tab on the Rutherford Data Center Facebook page: www.facebook.com/RutherfordDataCenter .

The committee’s criteria will include the number of Rutherford County citizens served by the organization and the proposed program, how well the services of the organization and proposed program match the needs of county citizens and how closely the program addresses Facebook priorities such as using technology in education and economic development.

“In 2010, as we worked with Facebook officials on deciding where to locate, one of things that struck everyone was Facebook’s deep interest in the local community, not just the facts and figures of its land purchase,” said John Condrey, county manager.  “Facebook consistently stated how much it wanted to be a part of and assist the community where it located.   They’ve put that commitment into action today, and Rutherford County is all the better for it.”

Data Center Develops

George Henry — who has worked in data centers for more than 15 years — also provided an update on the Facebook construction in Rutherford County.

“Big changes have come to the parcel of land that is quickly becoming the home of Facebook’s Rutherford County data center,” said Henry. “Some things are easily seen, like the demolition of the long vacant Mako Marine Building.  Others are more subtle, but absolutely essential, like our ongoing work to the site’s electrical substation.”

More than 440 people have worked on the construction phase of the Facebook data center totalling almost 400,000 man hours, including more than 22,000 last week alone.

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