Fitch Rates NIFA Sales Tax Secured Bonds, Series2000A, `AA+'.

Business Editors

NEW YORK--(BUSINESS WIRE)--Oct. 17, 2000

Fitch rates the Nassau County Interim Finance Authority's $260 million sales tax secured bonds, series 2000A, 'AA+'. The rating incorporates criteria relating to both structured and municipal financings.

Nassau

County Interim Finance Authority (NIFA) was established by an act of the New York State Legislature earlier this year to fulfill both a monitoring and advisory role and to provide a bankruptcy remote funding vehicle for the County of Nassau. Pursuant to the act, sale and compensating use taxes authorized by the state and imposed by the county will be paid to NIFA. The act authorizes NIFA to issue debt backed by those sales tax revenues, which are NIFA's primary assets.

NIFA is a corporate governmental agency and an instrumentality of the State of New York, although the bonds are not debt of the state or the county and are solely payable from the sales tax revenues.

The bonds are secured by the 4 1/4% local sales tax, less 1/4% that is currently required to be paid to local municipalities within the county under the local government assistance program. Revenues from the sales tax will flow from the New York State Department of Taxation and Finance which collects the sales tax revenues, to the state comptroller and then directly to the indenture trustee for the benefit of bondholders. The county will receive residual revenues only after NIFA bondholders have been paid.

The Fitch rating reflects the bankruptcy remote, statutorily defined nature of the issuer; the bond structure involving a first perfected security interest in revenues which are not subject to appropriation; statutory and contractual covenants prohibiting action which would impair bondholders; the cash flow stream which provides strong coverage of debt service; New York State Department of Taxation and Finance as collection agent and a statutorily defined minimum debt service coverage.

Nassau County Interim Finance Authority Act

The Nassau County Interim Finance Authority Act was signed into law on June 23, 2000 by the Governor, creating NIFA, which has limited authority to oversee the county's finances and under certain circumstances, additional oversight authority. All issuances of bonds or notes by the county must be reviewed by the Authority, which has the ability to comment on the prudence of such borrowings. Pursuant to the act, bonds and notes may also be issued by NIFA, to finance capital projects and cash flow needs of the county, as well as, any county deficit.