Fitch Affirms Greenville, South Carolina's Water Revs at 'AAA'; Outlook Stable

NEW YORK--(Business Wire)--
In the course of routine surveillance, Fitch Ratings affirms its 'AAA' rating on
Greenville, South Carolina's $126.1 million in outstanding waterworks system
revenue bonds. The Rating Outlook is Stable.

The 'AAA' rating reflects the waterworks system's (the system) strong credit
metrics, including strong financial operations, low debt levels, long-term
capacity, and long standing financial management and planning. Other positive
credit factors include ample water supply, sizable cash balances and sound
security provisions. The system serves a customer base of 370,000 including the
City of Greenville (the city), the majority of Greenville County (the county),
and areas in neighboring counties. Future performance is expected to remain
strong or even improve.

The bonds are secured by a pledge of net revenues of the system. Both the debt
service coverage and liquidity levels historically have been strong, with solid
coverage of over 2 times (x) and large cash balances over 700 days. In fiscal
2009, all in coverage dropped to 1.8x due to a decline in capacity fees,
however, operational coverage remains strong and comparable to historical
coverage from operating revenues. Projected coverage remains at targeted levels
of 1.5x and above over the next five years. Projected assumptions assume 3% rate
increases over the next five fiscal years to residential users and conservative
growth assumptions (50% of historical averages). Operating cash reserves are
projected to increase from $13 million to $17 million over the same five year
period.

The system's five-year capital needs for fiscals 2010-2014 are moderate at $130
million based on the large service area. Major improvements include redundancy
operations and system rehabilitation. Additional system capacity expansion plans
have been postponed due to conservation efforts and a slowing economy. Funding
sources will be a combination of existing operating fund balances, ongoing
system operation revenues, capacity fees, debt proceeds and interest income.
Including projected long-term bond issuances in 2011 and 2013 for a combined $55
million, debt levels remain low. Residential rates for the system consist of
inside city and outside city rates. Historically the outside customers have paid
150% of the inside city rates. In comparison to other utilities, the inside city
rates and outside rates are moderate.

The system operates separately from the city and is run by a five-member
commission of public works, consisting of three commissioners elected at large
by city voters, along with the mayor and a city councilmember. The system serves
a much broader base of customers than the city. Indeed 85% of customers are
located outside the city, predominantly in the county. The county is located in
the northwest portion of the state. The county is a major economic and
commercial center located on the Interstate 85 corridor which connects the
City's of Charlotte, North Carolina and Atlanta, Georgia. Historically the
county's economy was driven by various manufacturing but has become more diverse
due to regional growth. The county's population is approximately at 405,000,
having grown 6.5% since the 2000 census. Median income levels for the county are
107% of state levels but 91% of the nation.

Additional information is available at www.fitchratings.com.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE '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
Alex Knight, +1-212-908-0181
Bud Littman, +1-212-908-0500
Cindy Stoller, +1-212-908-0526
cindy.stoller@fitchratings.com

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