Bond Rating - NEGATIVE

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The Negative Rating Watch reflects the potential additional fiscal strains of a planned $638 million debt-financed convention center upon an already pressured general fund beset by slim reserve levels, significant long-term liabilities and constrained revenue-raising ability.

--Long-term financial pressures include a voter-approved charter amendment that limits Metro's ability to increase its millage as well as sizable pension and OPEB liabilities in comparison to its operating profile.

--Debt levels, including the upcoming convention center financing, are above average, while amortization is below average.

WHAT COULD TRIGGER A DOWNGRADE?

--Issuance of convention center debt secured by a back-up pledge of non-tax general fund revenues could result in a minor downward adjustment to the rating, assuming the constancy of other credit factors.

SECURITY:

The GO bonds are payable from Metro's full faith, credit, and taxing power (YOU, Taxpayer). Metro has committed a debt service reserve deficiency make-up subject to appropriation as security for the district energy system bonds.