Fitch Rates Nassau Cnty Int Fin Auth, NY's $350MM Sales Tax Secured VRBs, 2008C-E Bank Bonds 'AA+'

NEW YORK--(Business Wire)--
Fitch Ratings assigns an 'AA+' to the following series of bank bonds
corresponding to the Nassau County Interim Finance Authority's (the authority)
sales tax secured variable rate bonds (VRBs):

--$150 million series 2008 C;

--$123.185 million series 2008 D-1;

--$26.815 million series 2008 D-2;

--$50 million series 2008 E.

Fitch also confirms the 'AA+' rating on the authority's outstanding bonds. The
Rating Outlook is Stable.

The bonds will be subject to mandatory tender for purchase and remarketing on
May 1, 2009 as a result of the substitution of the current liquidity facility
provided by Dexia. The 'AA+' underlying rating on the series 2008 C, 2008 D-1,
2008 D-2 and 2008 E, and the prospective bank bonds is based on the authority's
credit fundamentals and a review of bank bond terms, should the bonds become
bank-held.

The long term 'AA+' rating incorporates elements of both municipal and
structured finance credit analysis. NIFA is a bankruptcy-remote issuer, and the
bond structure grants a first-perfected security interest in sales tax revenues
to the bonds, which provide strong debt service coverage, even under stress
tests. Statutory and contractual covenants prohibit certain State of New York
(state) or Nassau County (county) actions to impair bondholder rights. The
primary credit concern is the right of the state and the county to alter the tax
structure. The county's general obligation (GO) bonds are rated 'A+' with a
Stable Rating Outlook by Fitch.

The rating also incorporates a review of the interest rate provisions, cure
period, and amortization schedule specified in the documents governing bank
bonds. Each subseries has different terms as each series is supported by a
different bank's letter of credit. After a tender, if any remarketing efforts
should fail and the bonds become bank-held, Fitch believes that the incremental
risk associated with the bank bonds would not have a material impact on the
authority's long-term credit rating. Although the presence of floating- to
fixed-rate swaps associated with the authority's variable-debt portfolio
somewhat limits the authority's options for dealing with increased debt service
costs, the authority has been able to manage the higher interest rates
associated with recent bank bonds.

NIFA's bonds are secured by a 4.25% local sales tax less the 0.25% currently
required to be paid to towns and cities and the up to 0.083% authorized to be
allocated to villages. The county has extended the 1.25% portion of the 4.25%
state-authorized rate through November 2009. The state collects sales tax
revenues and distributes them to the state comptroller with the state
comptroller then paying the revenues directly to the bond trustee. The county
receives residual revenues only after the payment of NIFA debt service and NIFA
operating requirements. Debt service coverage has exceeded the 4 time (x) level
since 2004 and in 2008 debt service coverage was 4.51x, down slightly from the
2007 level of 4.52x.

Sales tax revenue declined 1.1% on a cash basis in 2008 from the 2007 level
compared to 2008 budgeted (as revised) sales tax growth of 1.8%. The county has
lowered its estimate for 2009.

Nassau County's 2007 estimated population of 1.3 million residents has remained
relatively unchanged since the beginning of the current decade. The county's
economy benefits from its proximity to the New York City metropolitan area as
well as its own broad employment base and a diverse and wealthy tax base. The
county's unemployment rate of 5.6% in December 2008 measured below that of the
state (6.8%) and the nation (7.1%) but higher than the 3.7% in December 2007.
Wealth levels are well above average; in 2006 per capita money income equaled
135% and 155% of the state and national levels, respectively. The county is home
to 13 hospitals including North Shore-Long Island Jewish Health System, the
third largest non-profit secular health system in the country, employing over
31,000, and the Winthrop S. Nassau University Health System.

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
Ann G. Flynn, +1-212-908-9152
Amy R. Laskey, +1-212-908-0568
Cindy Stoller, +1-212-908-0526 (Media Relations)
cindy.stoller@fitchratings.com

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