Fitch Rates Winston-Salem, North Carolina's 2008 GOs 'AAA'; Outlook Stable

NEW YORK--(Business Wire)--
Fitch Ratings has assigned an 'AAA' rating to the city of
Winston-Salem, North Carolina's (the city's) approximately $5.1
million general obligation bonds, series 2008. The bonds are expected
to price June 10. Proceeds from the issuance will be used to fund
general government capital improvements. Fitch has also affirmed the
outstanding GO and certificates of participation (COP) ratings for the
city outlined below:

--$94.1 million outstanding GOs 'AAA';

--Series 2001A and 2006A COPs 'AA+';

--Series 2001B, 2001C, 2004A, 2004B and 2006B COPs 'AA';

--Series 2004, 2006C, and 2008C COPs 'AAA'.

The Rating Outlook is Stable.

The 'AAA' ratings are based on the city's excellent financial
operations and management, significant financial resources and
diversifying economic base, and low-to-moderate debt levels with rapid
amortization. The city's historical reliance on tobacco production
activities for economic and financial support has declined, and the
growth of health care, banking, and retail industries has reduced
concerns about the tobacco industry's downsizing.

Winston-Salem is a major economic and commercial center in
northwestern North Carolina and part of the growing 12-county Piedmont
Triad region. Health care and biotechnology are increasing in economic
prominence along with the financial services sector. The city is home
to two major medical facilities (Wake Forest University Baptist
Medical Center, employing 11,400 and Novant Health, which employs
7,500 at three area hospitals), a growing biotechnology research park,
and the operations of one of the nation's largest banking institutions
(Wachovia Corp., employing 3,055). As in many areas, the unemployment
rate has increased over recent months to 5.3% in March 2008 from 4.3%
a year earlier, although it remains on par with the state and nation.
Income levels are on par with the nation's and slightly above the
state's level.

The city's financial position is strong, characterized by ample
reserve and liquidity levels. Fiscal 2007 resulted in a $2.2 million
drawdown of fund balance due to increased service demands stemming
from a recent annexation. However, the city's unreserved fund balance
still represented a healthy 13.1% of spending. The city expects to end
fiscal 2008 with a surplus, increasing its fund balance to over 15% of
spending. The proposed fiscal 2009 budget shows modest growth and
maintains the same tax rate.

Overall debt is moderate, at 2.51% of market value and $2,078 per
capita. The fiscal years 2008-12 CIP totals $371.5 million, 76% of
which is for self-supporting solid waste and water and sewer
utilities. Bonds and certificates of participation will finance
approximately 77.9% of the CIP. The city has $10.5 million in
remaining voter authorized but unissued general obligation bonds,
which it plans on issuing in July 2009.

Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria and methodologies are available from this
site, at all times. Fitch's code of conduct, confidentiality,
conflicts of interest, affiliate firewall, compliance and other
relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings, New York
Rachel A. Barkley, 212-908-0514
Barbara Ruth Rosenberg, 212-908-0731
or
Media Relations:
Christopher Kimble, 212-908-0226

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