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Rating Action:

Moody's assigns Aaa rating to the City of Columbus' (OH) GO Bonds, Series 2013A-D and MIG 1 to Var. Pur. Limited Tax Notes, Series 2013

Global Credit Research - 13 Aug 2013

Affirms Aaa on outstanding GOULT and GOLT; Rating applies to $2.4 billion of total post-sale debt

New York, August 13, 2013 --

Moody's Rating

Issue: Various Purpose Limited Tax Bonds, Series 2013D (Federally Taxable); Rating: Aaa; Sale Amount: $23,550,000; Expected Sale Date: 08-26-2013; Rating Description: General Obligation

Issue: Various Purpose Unlimited Tax Bonds, Series 2013A; Rating: Aaa; Sale Amount: $239,100,000; Expected Sale Date: 08-26-2013; Rating Description: General Obligation

Issue: Various Purpose Unlimited Tax Bonds, Series 2013C (Federally Taxable); Rating: Aaa; Sale Amount: $3,725,000; Expected Sale Date: 08-26-2013; Rating Description: General Obligation

Issue: Various Purpose Limited Tax Bonds, Series 2013B; Rating: Aaa; Sale Amount: $95,790,000; Expected Sale Date: 08-26-2013; Rating Description: General Obligation

Issue: Various Purpose Limited Tax Notes, Series 2013; Rating: MIG 1; Sale Amount: $19,800,000; Expected Sale Date: 08-26-2013; Rating Description: Note: Bond Anticipation

Opinion

Moody's Investors Service has assigned a Aaa rating with stable outlook to the City of Columbus' (OH) $239.1 million Various Purpose Unlimited Tax Bonds, Series 2013A; $95.8 million Various Purpose Limited Tax Bonds, Series 2013B; $3.7 million Taxable Various Purpose Unlimited Tax Bonds, Series 2013C; and $23.6 million Taxable Various Purpose Limited Tax Bonds, Series 2013D.

Moody's also assigns a MIG 1 to the city's $19.8 million Various Purpose Limited Tax Notes, Series 2013. Concurrently, Moody's affirms the Aaa rating on the city's outstanding GOULT and GOLT debt, excluding approximately $1.9 million of unrated special assessment GO debt. Moody's maintains a Aa2 rating on the city's $ 67.96 million in RiverSouth Authority lease rental appropriation bonds. We also affirm the city's stable outlook on the city's general obligation and lease appropriation debt. Post sale, the city will have $2.4 billion of outstanding general obligation unlimited and limited tax debt.

SUMMARY RATINGS RATIONALE

The Series 2013A and Series 2013C bonds are secured by the city's general obligation unlimited tax pledge, unlimited as to rate or amount. The Series 2013B, Series 2013D, and Series 2013 notes are secured by the city's general obligation limited tax pledge, which is an ad valorem property tax pledge subject to the statutory 10-mill limitation, per Ohio state code. The lack of a rating distinction between the general obligation unlimited and limited tax debt reflects the state requirement that cities use all revenues, including available property tax millage under the 10-mill limitation statutory code, for the payment of debt service prior to any other uses.

The Aaa rating and stable outlook on the City of Columbus' $2.4 billion of general obligation unlimited and limited tax debt reflects the city's large and diverse economy that benefits from stabilizing institutions; conservatively managed debt profile strengthened by substantial untapped levy authority; and satisfactory financial operations that are supported by ample alternate liquidity and prudent fiscal policies and management.

The MIG 1 rating on the notes is based on the strength of the general obligation pledge and the city's intent to refund the notes with bonds or notes prior to maturity on September 1, 2014. The highest short term rating reflects an expectation for market access based on the city's overall credit quality, general practice to refinance bond anticipation notes over a week in advance of maturity, allowing time to implement contingency plans in case of market disruptions, and available liquidity to purchase the notes if market access becomes a significant problem.

Proceeds of the bonds will finance various capital needs and improvements across various departments, including health, safety, recreation, fleet management, transportation, electrical, and IT. Proceeds of the notes will refund, along with cash on hand, the city's 2012 notes, issued in the principal amount of $22 million. Payment on the notes and any refunding long-term debt is expected to come from special assessments, parking garage revenues, and tax increment revenues.

STRENGTHS

-Sizeable tax base that benefits from its central role in the state and regional economy and the stabilizing effect of major institutions including federal, state, and local government, major health care institutions, and The Ohio State University (revenue debt rated Aa1/stable outlook), one of the largest universities in the country.

-Prudent fiscal and debt management policies and practices that support a healthy financial position over the long-term and insure timely repayment of debt obligations, despite cyclical economic challenges.

-Continued development of operating reserves and a codified operating reserve policy.

-Demonstrated political and public support for budgetary adjustments and revenue enhancements when needed.

CHALLENGES

-Dependency on income tax revenues that cycle with economic conditions, as illustrated by income tax shortfalls in fiscal 2008 and fiscal 2009 that required significant use of the city's General Fund balance.

- Continued reductions in state aid expected for fiscal 2013.

Outlook

The stable outlook reflects our belief that the city will continue to maintain a healthy financial position over the long-term. This expectation is based on the city's ability and willingness to restore reserve levels, as demonstrated by continued appropriations to develop the Economic Stabilization Fund, a variety of sources of revenue flexibility, and continued political and public support for necessary revenue enhancement measures. Further, we believe that the city's carefully managed conservative debt policies enhance its ability to repay debt, despite operational pressures. The stable outlook also reflects the city's sizeable tax base that benefits from a diversity of employers that we expect will continue to support long-term gains in the city's income tax, its primary revenue source.

What Could Change the Rating Down or revise the outlook to negative:

-Any indication of inability or unwillingness to restore reserve levels that would appropriately reflect its Aaa rating.

-Weakened economic conditions that further erode the city's income tax base, resulting in severe budgetary pressures.

-The reversal or relaxing of the city's prudent fiscal policies and practices.

The principal methodology used in rating the general obligation debt was General Obligation Bonds Issued by US Local Governments published in April 2013.

The principal methodology used in rating the bond anticipation notes debt was Bond Anticipation Notes and Other Short-Term Capital Financings published in May 2007. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Mark G. Lazarus
Analyst
Public Finance Group
Moody's Investors Service, Inc.
100 N Riverside Plaza
Suite 2220
Chicago, IL 60606
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Jeffery Yorg
Asst Vice President - Analyst
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
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JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's assigns Aaa rating to the City of Columbus' (OH) GO Bonds, Series 2013A-D and MIG 1 to Var. Pur. Limited Tax Notes, Series 2013
No Related Data.
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