Fitch Rates Mississippi $100MM GO Notes`F1+'.

Business Editors

NEW YORK--(BUSINESS WIRE)--Oct. 6, 2000

Mississippi's $100,000,000 general obligation notes (Mississippi Gaming Counties Highway Improvements Project Issue), series 2000 due Oct. 1, 2001 are rated 'F1+' by Fitch.

The notes will be sold competitively

on Oct. 10 and are general obligations of the State of Mississippi; full faith and credit pledged. The notes are non-callable and are expected to be funded next year by a long term general obligation bond issue of which $200 million is authorized. Additionally, the rating on approximately $2.1 billion outstanding general obligation bonds are affirmed at 'AA'.

Mississippi's institution of financial mechanisms and controls establishes a firm framework for stable financial operations, buoyed in recent years by economic expansion brought on by the introduction of gaming. Revenue estimating procedures are conservative although revenues underperformed slightly this past fiscal year. The budget anticipates stronger revenues this year although initially revenues continue to underperform. Debt levels remain moderate, although they have risen, and the bulk of state debt is general obligation.

After the current sale, net tax-supported debt will amount to about $2.39 billion, or $888 per capita, 4.2% of both estimated full value and personal income. While higher than previous levels, the ratios remain well within the moderate range. There is a considerable amount of authorized but as yet unissued debt, more than $1.29 billion. While the fiscal year just ended incurred an operating deficit, operations have generally been very successful generating surpluses that have been retained. At June 30, 2000, the general fund cash balance is estimated at $11.6 million, in addition to $246.5 million in the stabilization fund or just under the 7.5% of appropriations limit. General fund tax revenue collections for the first three months of fiscal year 2001 through Sept. 30 are about 5.0% below projections, with overall general fund revenues running about 2.9% below projections. In response, the governor is reserving 5% of appropriation authority, excluding certain agencies.

Mississippi's agricultural and manufacturing economy has diversified with the introduction of gaming. The resulting early rapid expansion has slowed, although growth continues in areas related to the hospitality industry. Total employment increased 1.9% in 1999, slightly below the national rate, and personal income growth decelerated to about 75% of the national growth rate.

Fitch is an international rating agency that provides global capital market investors with the highest quality ratings and research. Dual headquartered in New York and London with a major office in Chicago, Fitch rates entities in 75 countries and has some 1,100 employees in more than 40 local offices worldwide. The agency, which is a combination of Fitch IBCA and Duff & Phelps Credit Rating Co., provides ratings for Financial Institutions, Insurance, Corporates, Structured Finance, Sovereigns and Public Finance Markets worldwide.