(New York, N.Y.) Fitch Ratings assigns an ‘AAA’ rating to the following Wake County, North Carolina’s (the county) general obligation (GO) bonds:

–$414.5 million refunding series 2010C.

The bonds are expected to sell competitively on April 28, 2010.

In addition, Fitch affirms the following:

–$1.9 billion in outstanding GO bonds at ‘AAA’, including a portion to be refunded with the current issuance.

The Rating Outlook is Stable.

RATING RATIONALE:

–Superior wealth levels and a breadth of employment opportunities, locally and regionally, underscore Wake County’s strong economy and solid tax base.

–Excellent financial management has resulted in solid reserve levels and controlled expenditure growth.

–The overall debt burden is moderate in spite of sizeable capital needs, particularly for education requirements.

KEY RATING DRIVER:

–Positive operating results are expected to continue despite budgetary pressures and the broader economic softening.

SECURITY:

The bonds are general obligations of the county secured by its full faith and credit and unlimited taxing power.

CREDIT SUMMARY:

Wake County’s population increased 48% in the 1990s and 38% since 2000 to an estimated 866,410 in 2008, although this explosive growth is expected to moderate somewhat over the next two decades. Supporting the employment base is a diverse pool of employers, including state and local government, technology, health care, and other services. The largest employers reflect the breadth of the economy, and along with adjacent Durham County, Wake County is home to Research Triangle Park, a campus of 170 biotechnology firms and 42,000 employees. The unemployment rate, at 9.2% for February 2010, is consistently below state and national averages. Wealth indicators across the county are above-average, with median household income 24% above the national level.

Financial management is very strong, adhering to policies and goals that provide a framework for accommodating the county’s growing needs. Subsequent to a $13 million drawdown of fund balance, largely attributable to sales tax declines, fiscal 2009 concluded with an unreserved general fund balance of $97 million, equal to a sound 10.1% of spending. When the statutorily required reserve is included, available reserves rise to 15.9%. The county also reported an unreserved balance of $145 million in its debt service fund, which while intended to pay future years’ debt service, is available for general use and adds to the county’s overall financial flexibility. The adopted fiscal 2010 general fund budget is roughly 3% below the amended fiscal 2009 budget, partly attributable to a 16% decline in budgeted sales tax revenue, and it does not rely upon appropriated fund balance. Current county projections assume that fund balance will remain stable, with expenditure reductions compensating for sales tax collections coming in below budget.

The county’s overall debt burden is moderate at roughly $3,558 per capita and 2.6% of market value, and amortization of principal is above average at 60% in 10 years. The adopted capital improvement plan (CIP) for fiscal years 2010-2016 totals $903 million and is smaller than plans in previous years, reflecting moderation in school needs and the county’s desire to retain financial flexibility given current economic conditions. The county’s financial planning model for its debt service fund through fiscal 2016 incorporates reasonable growth rates for dedicated revenues, which include a portion of ad valorem and sales tax revenues, as well as interest income. Continued population and tax base growth and the county’s consistent, sound capital and financial planning are expected to keep the debt burden manageable, in spite of pressures from the sizeable capital needs.

Applicable criteria available on Fitch’s website at www.fitchratings.com:

–’Tax-Supported Rating Criteria,’ dated Dec. 21, 2009.

–’U.S. Local Government Tax-Supported Rating Criteria’, dated Dec. 21, 2009.

Additional information is available at www.fitchratings.com.