Fitch Rates Corpus Christi, Texas' Gen Imprvt Bonds 'AA-'; Outlook Stable

AUSTIN, Texas--(Business Wire)--
Fitch Ratings assigns an 'AA-' rating to Corpus Christi, Texas' (the city) $90
million general improvement bonds, series 2009. The bonds are scheduled to sell
via negotiation the week of May 1, 2009. The bonds are secured by a property tax
levy, limited to $2.50 per $100 taxable assessed valuation (TAV), on all taxable
property within the city.

Fitch also affirms the city's existing debt ratings as follows:

--$152 million limited tax general obligation (GO) bonds at 'AA-';

--$90.4 million certificates of obligation (COs) at 'AA-';

--$18.5 million sales tax revenue bonds (baseball stadium project), series 2004,
at 'AA-';

--$43.7 million sales tax revenue refunding and improvement bonds (arena
project), series 2002, at 'A+'; and

--$38.9 million sales tax revenue bonds (seawall project), series 2001, at 'A+'.

The Rating Outlook for all bonds is Stable.

The 'AA-' rating reflects the city's growing economy and tax base, sound
financial operations, moderate debt profile, and conservative stewardship.
Benefiting from resurgent tax revenues, particularly sales taxes, general fund
reserve levels have grown, while the property tax rate has been reduced. The
city's sales tax receipts and taxable assessed valuation (TAV) continue to
expand but at a more moderate pace after notable gains in the recent housing
boom. Fitch notes this stability of sales tax revenues, even during the current
recession, as a principal factor in the affirmation of city's sales tax revenue
debt ratings. Non-tax revenue fluctuations may modestly narrow the city's
financial reserves, based on conservative assumptions. Along with the
expenditure containment measures and significant self-support for COs, these
factors have allowed the city to manage its finances and capital plan prudently
while maintaining a cushion beneath its voter-approved tax cap. Maintenance of
adequate reserves is key to preserving credit quality.

With an estimated 2009 population nearing 300,000, Corpus Christi is the eighth
largest city in Texas and the largest on the Gulf Coast. The diverse economic
base consists primarily of petrochemicals, shipping, tourism, agriculture, and
military. The Port of Corpus Christi ranks as the sixth largest in the nation
based on tonnage and 44th in the world. Padre Island National Seashore, with
approximately 70 miles of beach, and Mustang Island State Park are leading
tourist attractions. The Corpus Christi Army Depot is the largest industrial
employer in South Texas, and several U.S. Navy installations are located in the
area. The Ingleside Naval Station, located across the bay, is scheduled for
closure in 2010. At that time, property ownership will revert to the Port of
Corpus Christi for redevelopment, which could, over time, offset the impact of
losing the military presence. The unemployment rate of 5.6% for February 2009
remains favorable and slightly below the statewide average.

Audited fiscal 2008 results for the general fund recorded nearly balanced
results. The fiscal 2008 ending unreserved fund balance totaled $27.6 million,
or a strong 14.9% of spending, well in excess of the city's stated policy of
10%. Fiscal 2009 operations are being pressured by non-tax revenue declines,
although sales tax receipts have been well above budget through March. However,
the city is conservatively projecting modest declines for the remainder of the
year. Coupled with planned pay-go capital outlays, building permit fee
shortfalls, and delinquent industrial district payments, the city's cushion may
decline by as much as $4.5 million, leaving still adequate reserves. The
preliminary fiscal 2009 budget proposal includes balanced operations, level or
modestly declining sales tax receipts, and no pay hikes for civilian personnel.

The current offering is the first installment of a $153 million authorization
approved by voters in November 2008 which city officials do not anticipate will
require a tax rate increase based on modest assumptions of tax base growth.
Direct debt ratios are moderate, reflecting sizable self-support. Overall debt
ratios climb to above-average levels, primarily due to area school districts and
the local community college. Payout is slightly above average with 57% principal
retirement in 10 years.

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, Austin
Jose Acosta, +1-512-215-3726
Gabriela Quiroga, +1-512-215-3731
Cindy Stoller, +1-212-908-0526
(Media Relations, New York)
cindy.stoller@fitchratings.com

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