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Summary: <br /> Lee County, North Carolina; Appropriations; <br /> General Obligation <br /> Credit Profile <br /> US$32.75 mil Rd oblig bnds ser 2018 due 05/01/2038 <br /> Long Term Rating AA-/Stable New <br /> Lee Cnty GO comnty coll bnds <br /> Long Term Rating AA/Stable Affirmed <br /> Lee Cnty certs of part(Pub Sch&Comnty Coll Proj)ser 2004 <br /> Unenhanced Rating AA-(SPUR)/Stable Affirmed <br /> Many issues are enhanced by bond insurance. <br /> Rationale <br /> S&P Global Ratings assigned its'AA-'long-term rating to Lee County,N.C.'s series 2018 limited obligation bonds <br /> (LOBS)based on the application of its Issue Credit Ratings Linked To U.S.Public Finance Obligors'Creditworthiness <br /> criteria,published Jan. 22,2018,on RatingsDirect.S&P Global Ratings also affirmed its'AA'long-term rating on the <br /> county's general obligation(GO)bonds outstanding,as well as its'AA-'rating on the county's existing certificates of <br /> participation(COPS). <br /> The series 2018 LOBS will finance project costs associated with renovating and constructing a new elementary <br /> campus,provide funding for courthouse renovations,and fund parks and recreational project costs. <br /> The LOBs and COPS are secured by payments made by Lee County pursuant to a trust agreement.We rate these <br /> obligations one notch lower than our GO rating on Lee County to account for the appropriation risk associated with <br /> the payment.The county has pledged its best efforts to seek appropriations annually out of its operating budget,and <br /> has considered the affordability of the payments in its long-term plans.Our consideration of the affordability and <br /> likelihood of the annual appropriation payments is reflected in the'AA-'rating.In our view,the features of the trust <br /> agreements and terms are standard with no unusual risks regarding timely payment of debt. <br /> The county's faith-and-credit-and-taxing-power pledge secures the GO debt. <br /> We base our view of Lee County on the following factors: <br /> • Weak economy,with projected per capita effective buying income at 74.6%of the national level and market value <br /> per capita of$88,831; <br /> • Strong management,with good financial policies and practices under our Financial Management Assessment(FMA) <br /> methodology; <br /> • Strong budgetary performance,with operating surpluses in the general fund and at the total governmental fund level <br /> WWW.STANDARDANDPOORS.COM/RATINGSDIRECT APRIL 6,2018 2 <br />