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MOODY�S INVESTORS SERVICE Rating Action: Moody's assigns Aa3 to Lee County, NC's Limited Obligation Bonds, Series 2018 Global Credit Research -06 Apr 2018 $ 32.7 Million of debt affected New York, April 06, 2018--Moody's Investors Service has assigned a Aa3 rating to Lee County's(NC)$32.7 million Limited Obligation Bonds Series 2018. RATINGS RATIONALE The Aa3 rating incorporates reflects the risk of non-appropriation;the more essential nature of the financed projects to the county's mandate; adequate legal provisions and the sound long-term tax-backed credit profile of the county. Lee County benefits from a favorable location in the central portion of the state, between major employment centers, sound financial operations, affordable debt and pension profiles and prudent management. RATING OUTLOOK Outlooks are generally not assigned to issuers with this amount of debt outstanding. FACTORS THAT COULD LEAD TO AN UPGRADE - Increased reserves - Broad expansion and diversification of local economy FACTORS THAT COULD LEAD TO A DOWNGRADE -Failure to appropriate debt service payment - Increased unemployment and tax base erosion -Depleted financial reserves LEGAL SECURITY Debt service on the 2018 Limited Obligation Bonds is secured by the county's pledge to make annual debt service appropriations. The more essential nature of the projects and pledged assets somewhat mitigates the risk of non-appropriation by the county. The 2018 Limited Obligation Bonds will be secured by the County's 2018 Trust Agreement and security interest in Wicker Elementary School Facility. The county will make payments under the Installment Purchase Contract directly to the Trustee, at least five days prior to debt service payment dates. Further strengthening security, the county has covenanted to include the appropriation in its preliminary budget, and it must be removed from the annual budget by an affirmative vote of the county board of commissioners. USE OF PROCEEDS Proceeds from the 2018 issuance will fund various county-wide projects including: Construction of the Wicker Elementary School, upgrades and renovations to the County Courthouse and Government Center, and Parks and Recreation projects. PROFILE Located in the geographic center of North Carolina, 25 miles from Pinehurst and 46 miles southeast of Raleigh (Aaa stable)and Durham (Aaa stable).The population was estimated at 59,660 in 2015.The county is comprised of 255 square miles.