TEXT-Fitch rates Missouri Board of Public Buildings bonds

July 23 - Fitch Ratings assigns an 'AA+' rating to the following state of
Missouri Board of Public Buildings bonds:

--$280 million special obligation refunding bonds, series A 2012.

The bonds are expected to be sold through competitive bid on Aug. 2, 2012.

In addition, Fitch affirms the following ratings:

--State general obligation (GO) bonds at 'AAA';
--Certificates of participation, series A 2011 refunding at 'AA+';
--Board of Public Buildings special obligation and state building bonds at
'AA+';
--Missouri Development Finance Board leasehold revenue bonds at 'AA+';
--Missouri Health and Educational Facilities Authority (University of
Missouri-Columbia Arena Project) educational facilities revenue bonds at 'AA+';
--Regional Convention & Sports Complex Authority state appropriation bonds at
'AA'.

The Rating Outlook is Stable.

SECURITY

The bonds are special obligations of the board payable from annual state general
assembly appropriations.

KEY RATING DRIVERS

--APPROPRIATION SECURITY: Bond payments require annual state legislative
appropriation, resulting in a rating one notch below the State of Missouri's
'AAA' GO rating. The state, acting through its Office of Administration,
covenants to request an annual appropriation from the Missouri legislature to
fund rental payments sufficient to pay debt service. Abatement is not permitted.

--LOW DEBT LEVELS: The state's debt burden is low with minimal GO debt. Bonds
issued for transportation needs represent 70% of total state net tax-supported
debt.

--CONSERVATIVE FINANCIAL MANAGEMENT: Missouri has a long record of conservative
operations and has consistently displayed a willingness and ability to support
fiscal balance. The state's financial flexibility and liquidity position remain
healthy, supported by reserves that remained fully funded throughout the
recession.

--BROAD ECONOMY SIMILAR TO U.S.: The state's economy is broad and diverse. The
economic profile and sector distribution are similar to those of the nation,
although recent performance has been weaker than the U.S. experience.

CREDIT PROFILE

The 'AA+' rating on the special obligation bonds, one notch below the state GO
rating of 'AAA', reflects the requirement of annual appropriations for debt
service. The bonds are special obligations of the board, payable from net income
and revenues pledged by the board, which consist primarily of monies
appropriated by the general assembly. The state, through its Office of
Administration, covenants to request annually an appropriation from the Missouri
legislature to fund rental payments sufficient to pay debt service. The state
has a record of timely budget adoption.

The board consists of the governor, lieutenant governor, and the attorney
general; each project funded by it is specifically approved by the legislature.
The bonds are not secured by a lien on the initially financed projects. Current
bond proceeds will be used to refinance certain outstanding special obligation
bonds of the board. Savings will be taken in fiscal years 2013 and 2014 for
budget relief, with modest dissavings thereafter. Although refunding debt for
budget relief is not a regular practice of the state, Fitch notes that the
magnitude of the budget relief is relatively modest ($45 million in fiscal 2013,
including this offering and a transaction scheduled for the Fall) and outyear
dissavings minimal.

Missouri's 'AAA' GO rating reflects a low debt burden, historically conservative
financial operations, and a broad and diverse economy. The state has a long
record of maintaining fiscal balance through spending restraint. The budget must
be balanced, and the governor has strong constitutional authority to withhold
funds as needed. Additional financial flexibility is provided by a budget
reserve fund (BRF) equal to 7.5% of net general revenues; notably, reserve funds
were not drawn on in the recession.

Although state revenues were negatively affected in the recession, the state
consistently acted to maintain balance. Net general revenues for fiscal 2009,
initially forecast to rise 3.4%, ended down 6.9%. In response, the governor
implemented several rounds of spending cuts, totaling $480 million. The revenue
forecast for fiscal 2010 initially assumed a 1% increase in net general revenue,
but the revenue outlook was subsequently revised downward on several occasions,
followed by prompt action to lower planned spending. Actual revenues in fiscal
2010 declined by 9.1%, with individual income and sales taxes down 9.1% and 4.5%
from the prior year, respectively.

Initial revenue projections for fiscal 2011, made in January 2010, forecast
revenue growth of 3.6%. The enacted fiscal 2011 budget, totaling $7.9 billion,
included significant spending cuts, consolidations and efficiency measures, as
well as $859 million of federal stimulus funds. Working revenue estimates were
revised downward prior to the start of the fiscal year and the state restricted
spending to maintain balance. At June 30, 2011, the state's ending cash balance
totaled $379 million, a level higher than prior estimates given revenue
overperformance and lapsed spending.

The enacted budget for fiscal 2012 was initially based upon expected revenue
growth of 4% and was balanced through the continuance of the fiscal 2011
spending restrictions, level-funding of K-12 formula aid, the use of remaining
stimulus funds, and a 7% reduction in higher education spending, among other
measures. Fiscal 2012 ended with revenues up 3.2% year-over-year. Personal
income tax revenue rose 5.9% and sales tax revenue 4.9%. Personal income tax
revenues equal approximately 65% of general revenues, and sales taxes about 25%.
The ending cash balance for fiscal 2012 was $205 million.

Missouri maintained balance without revenue increases again in fiscal year 2013,
which began on July 1, including $45 million through the debt refundings
discussed earlier and use of $40 million in monies from the national mortgage
settlement to fund higher education. The December 2011 forecast for fiscal 2013
projects revenues up 3.9%, to $7.6 billion, including the mortgage settlement
monies. Personal income taxes are forecast up 3.2%, and sales taxes 2.5%
compared to fiscal 2012 projections.

Missouri's economy is broad based, with a profile very similar to that of the
nation. Although Missouri's economic growth lagged that of the U.S. between 2004
and 2007, the state fared better than the nation as it entered the recent
recession. However, performance in the recovery has lagged. As the U.S. saw 1.1%
job growth in 2011 state employment remained flat, and growth has continued to
prove evasive in 2012 as the nation adds jobs. The state's unemployment rate was
greater than or equal to the U.S. rate on an annual basis from 2004 through
2009, but recent figures have been below those of the nation. In May 2012,
Missouri's 7.3% unemployment was 89% of the U.S. average, partly reflecting
labor force declines in the state. Measured by personal income per capita,
Missouri ranks 29th among the states, at 92% of the U.S. level.

The state's debt burden is low, with net tax-supported debt equal to 1.9% of
2011 personal income. Debt levels increased as a result of borrowing for
transportation needs, including bonds issued under voter-approved Amendment 3
and grant anticipation revenue vehicle (GARVEE) bonds, and approximately 70% of
outstanding tax-supported debt has been issued for transportation purposes. GO
bonds constitute only 10% of outstanding debt, with the remainder consisting of
appropriation-supported issues.

As of June 30, 2011, the reported funded ratio of the state's largest pension
system was 79.2%. Using Fitch's more conservative 7% discount rate assumption
rather than the system's 8.5%, the funded ratio falls to 68%. The state has
consistently funded its actuarially required contributions to the system. On a
combined basis, the burden of net tax-supported debt and adjusted unfunded
pension obligations is well below the 6.6% of personal income median for U.S.
states rated by Fitch.

Additional information is available at 'www.fitchratings.com'. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

In addition to the sources of information identified in Fitch's Tax-Supported
Rating Criteria, this action was additionally informed by information from IHS
Global Insight.

Applicable Criteria and Related Research:
--'Tax-Supported Rating Criteria' (Aug. 15, 2011);
--'U.S. State Government Tax-Supported Rating Criteria' (Aug. 15, 2011).

Applicable Criteria and Related Research:
Tax-Supported Rating Criteria
U.S. State Government Tax-Supported Rating Criteria