TEXT-Fitch affirms various Iredell County, N.C. ratings

Aug 8 - Fitch Ratings takes the following rating action on Iredell County,
North Carolina:

--$39.13 million general obligation (GO) bonds, affirmed at 'AA+';
--$4.36 million series 2000 installment payment revenue bond affirmed at 'AA',
issued by the Iredell County Public Facilities Corporation;
--$23.98 million series 2003 certificate of participation (COPs) affirmed at
'AA', issued by the Iredell County Public Facilities Corporation.

The Rating Outlook is Stable.

SECURITY

The GO bonds are secured by the full faith, credit and unlimited taxing power of
the county.

The installment payment revenue bonds and COPs are secured by installment
payments pledged by Iredell County to the corporation pursuant the trust
agreement. The corporation assigns substantially rights to receive installment
payments and the deed of trust to the trustee. The county has pledged several
schools as collateral.

KEY RATING DRIVERS

SOUND FINANCIAL POSITION: Reserve levels and financial flexibility remain sound
supported by conservative budgeting practices.

STRONG MANUFACTURING PRESENCE: Iredell County's economic base is heavily
concentrated in manufacturing; however, a favorable location in close proximity
to Charlotte promotes continued development and expansion. Unemployment levels
have improved but remains above average, but wealth levels are on par with state
averages and slightly below U.S. averages.

AFFORABLE DEBT RATIOS: Fitch expects the debt burden to remain low due to
limited capital needs coupled with pay-as-you-go capital funding.

APPROPRIATION RISK AND ESSENTIAL ASSETS: The 'AA' rating on the COPs and
installment payment revenue bonds reflects the county's credit characteristics
as well as solid lease provisions and essentiality of the leased assets.

CREDIT PROFILE

HEALTHY RESERVE LEVELS DESPITE RECENT DECLINES
Despite recessionary challenges, the county's financial flexibility remains
ample and the unreserved general fund balance is strong. After a string of
consecutive net surpluses from fiscal years 2003-2008, the general fund posted
net deficits in fiscal years 2009 and 2010 to fund capital projects. Despite the
declines, the unreserved general fund balance remained healthy at fiscal
year-end 2010 at 15.7% of spending.

For fiscal 2011, the county budgeted a $7.3 million draw on general fund
balance. However, the county underspent the budget by 6% and realized an uptick
in sales tax collections, which resulted in an operating surplus of $4.3
million. Fiscal 2011 ended with a solid unrestricted fund balance (the sum of
assigned, unassigned and committed under GASB 54) of $32.1 million or 21.3% of
operating expenditures and transfers out. The restricted fund balance includes
the North Carolina's required statutory reserve for receivables totaling $12.3
million. Inclusion of this amount makes the balance more comparable to an
unrestricted balance in other states and equals 29% of spending.

STRONG RESULTS ANTICIPATED FOR FISCAL YEAR 2012
The fiscal 2012 budget was adopted with a four-cent property tax rate increase
in part to offset declines in real estate value in fiscal 2011 and 2012. The
budget also funds a $273,884 addition to fund balance. Preliminary year-end
results show a $1.15 million operating surplus that will be used to strengthen
the county's unassigned fund balance.

BALANCED FISCAL 2013 BUDGET
The fiscal 2013 adopted budget is balanced with a modest $300,000 (less than 1%
of the budget) general fund balance appropriation for public safety. The
property tax rate remains unchanged at a very competitive rate of $0.485 per
$100 of assessed value (AV), which is well below the state cap of $1.50 per $100
of AV. Fitch notes the budget does not include any notable spending cuts. Given
the county's historical financial performance, Fitch expects management to
continue to maintain sound reserve levels.

STABLE MANUFACTURING BASED ECONOMY
Iredell County is located in the Piedmont region of North Carolina, immediately
north of Mecklenburg County. Statesville, the county seat, is 40 miles north of
Charlotte and 50 miles southwest of Winston-Salem. Manufacturing is a
significant economic driver in the county, representing about 19% of employment.
Fitch notes that weakness in this sector has resulted in unemployment levels
that remain pressured at 9.8% as of May 2012, exceeding state and national
levels. However, Fitch observes that recent investments by the county's largest
employers provide a positive outlook for future job growth. Income levels, as
measured on a per capita and median household basis, are on par with state
averages and slightly below the U.S. average.

Both residential and commercial/industrial growth is occurring primarily in the
southern area of the county near Charlotte. In 2011, 61 economic and
infrastructure development projects were recorded in the county creating 1,525
new jobs and $369.9 million in capital investment. Lowe's Companies Inc. is the
county's largest employer, has its corporate headquarters in the county; while
the campus currently employs about 3,000, planned expansions will increase the
headquarters' workforce to 8,000-10,000. Other significant development projects
are underway, including the Langtree at the Lake residential development which
will include 300 luxury apartments in phase I and a total $2 billion investment
when completed.

The county's tax base is relatively diverse, with the top 10 taxpayers
accounting for 6.2% of assessed valuation. Largest taxpayers include Lowe's,
Duke Energy, and NGK Ceramics. Following a reassessment in 2008 taxable assessed
value (TAV) increased through 2011. Fiscal 2012 TAV declined by 2.3%, reflecting
another quadrennial reassessment. The county increased the property tax rate to
$0.485 per $100 of valuation, which is 3% greater than the revenue-neutral rate.
Relative to neighboring counties, the property tax rate is well below average.
Management is projecting 1% growth in assessed value in fiscal 2013 which Fitch
believes is reasonable based on year-to-date permit activity.

LOW DEBT RATIOS
The county's overall debt levels are low at $2,481 per capita and 1.9% of TAV
and are expected to remain so given the absence of any future borrowing plans.
The county does not have a formal long-range capital improvement plan, which
Fitch views negatively. In fiscal 2012 the county funded a facility improvement
plan totalling $1.6 million. The fiscal 2013 budget includes $329,000 in funding
toward a future facilities capital project fund.

The county's Task Force on School Facilities recommended considerable capital
investment in education in a 2008 report, and management reports almost all of
their recommendations were adopted using 2008 COPs proceeds, lottery proceeds
and pay-as-you go capital funding. The one exception was construction of a
replacement elementary school which was postponed until revenues sufficient to
meet debt service become available. A 2012 report has been completed. Due to
flat student enrollment growth no additional capital projects are envisioned
over the near term. The rapid amortization of nearly 70% of principal within 10
years offsets somewhat high debt service as a percent of the general fund
expenditures of 18%.

AFFORDABLE PENSION AND OPEB COSTS NOT A CREDIT PRESSURE
The county's contribution to various pension plans consumed approximately 2.6%
of total spending in fiscal 2011. The bulk of the annual cost is related to the
county's participation in the Local Government Employees' Retirement System,
which is among the strongest funded state pension systems. An additional less
than 1% of the budget is allocated to the cost of other post-employment benefits
(OPEB). All costs are expected to remain stable for fiscal 2012 and 2013.

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
Creditscope, University Financial Associates, S&P/Case-Shiller Home Price Index,
IHS Global Insight, National Association of Realtors, North Carolina Department
of Commerce Division of Employment Security, and the Charlotte Regional Realtor
Association

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

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