OREANDA-NEWS. Fitch Ratings has affirmed the following ratings:

--\$7 million Louisiana Local Government Environmental Facilities and Community Development Authority (the authority) revenue bonds (City of Bossier City Public Improvement Projects) series 2007 at 'A+';

--Bossier City (as obligor for the bonds) implied unlimited tax general obligation (ULTGO) at 'AA-'.

The Rating Outlook is Stable.

SECURITY:

The bonds are secured by a loan agreement between the authority and Bossier City (the city). Under the loan agreement the city is obligated to make annual appropriations from lawfully available funds to pay debt service.

The city's obligation is absolute and unconditional, not subject to any rights of non-appropriation, abatement, or deduction. The city covenants that it will remain obligated under, and will not terminate, the agreement.

KEY RATING DRIVERS

SOUND FINANCES AND FINANCIAL FLEXIBILITY: City finances have improved in recent years, featuring balanced operations and healthy reserve levels, despite some use of fund balance for one-time spending needs.

CITY RELIANT ON GAMING, MILITARY: The city's economy and revenue structure, with sales taxes a key revenue source, are reliant on gaming, which has seen consistent declines prior to the recent opening of a new casino, and related activity, a volatile resource base. The presence of Barksdale Air Force Base provides economic stability.

AVERAGE DEBT RATIOS, HIGH CARRYING COSTS: Debt ratios related to population and assessed value are average and expected to remain so given no additional near term debt issuance plans and an average amortization rate. However, carrying costs (including debt service, pension and other post-employment benefits [OPEB]) payments are high as a percentage of governmental spending.

RATINGS BASED ON CITY'S CREDIT QUALITY: The implied ULTGO and revenue bond ratings are based on the credit quality of the city, as obligor. The revenue bond rating is capped by the implied ULTGO rating, and the one-notch rating distinction reflects the lawfully available funds pledge and appropriation risk.

RATING SENSITIVITIES:

MAINTENANCE OF BALANCED FISCAL OPERATIONS: Maintenance of balanced financial operations and adequate reserves is key to long-term credit stability, particularly given the city's dependence on the potentially volatile gaming sector.

ECONOMIC CONCENTRATION: The city is reliant on the gaming sector, which has shown declines and remains vulnerable to the competitive Oklahoma gaming environment and potential gaming legalization risk in Texas. This economic concentration is a credit challenge, inhibiting upward rating movement.

CREDIT PROFILE:

Bossier City is located in northwestern Louisiana, near Shreveport. Population, about 66,000 in 2013, grew 17% since 2000.

IMPROVED FINANCIAL OPERATIONS

City finances improved in 2010 and 2011, with operating surpluses increasing reserve levels after three consecutive years of operating deficits after transfers. A planned draw down of the balance in 2012 (\$2.5 million for a legal settlement with a private developer legal) resulted in still adequate unrestricted fund balance of \$8.2 million (14.4%). The city's 2013 operations were essentially balanced, with only a modest deficit (less than 1%) reflecting a one-time required payment adjustment related to fire fighter retirement plan costs. The 2013 unrestricted general fund balance totalled \$7.9 million or 14.5%.

For 2014, the city currently estimates a small surplus due to lower than budgeted expenditures and stronger revenue performance. The city budgets expenditures conservatively, including assuming full staffing levels. In recent years, this has resulted in actual results exceeding budgeted expectations. The 2015 budget is balanced, but the city expects that conservative budgeting will again lead to stronger performance. In 2014, the city adopted a formal fund balance policy requiring an unassigned general fund ending balance of 15% of expenditures.

The city's police and fire millages expire at the end of 2015. In March, voters will be asked to renew the millages for another 10 years. These millages have historically received strong support due to the essentiality of the services.

RESERVES OUTSIDE GENERAL FUND PROVIDE ADDITIONAL FISCAL FLEXIBILITY

Reserves outside the general fund provide substantial additional flexibility and support for city finances. The Riverboat gaming special revenue fund, which is funded through a tax on gross gaming revenues, is required by city ordinance to carry a balance of \$30 million. Amounts in excess of this can be used for capital expenditures or other general fund spending. The public health and safety permanent fund contains \$18 million held in perpetuity from the proceeds of the sale of the Bossier Medical Center. The fund's corpus can only be used with the approval of the state Attorney General, although investment earnings are used for public health and safety needs. In 2013, the combined balances from these funds and the general fund totaled 102% of general fund spending.

CONCENTRATION IN GAMING SECTOR

The local economy is concentrated in gaming and related tourism activities. The city is home to four casinos and there is also gaming activity at the city's horse track. While the city experienced growth in sales tax and gaming revenues in 2013 and 2014, aided by the opening of the new Margaritaville casino in 2013, these revenue streams are economically sensitive, and have experienced past volatility and declines. Area gaming activity is also pressured by competition for the Dallas-Fort Worth market from the tribal casinos in Oklahoma. In addition, there have been proposals for gaming legalization in Texas. Caesar's Entertainment, parent company of two city casinos (Horseshoe Casino and Harrah's Louisiana Downs) recently filed for bankruptcy. Fitch does not expect the parent company's restructuring to have a negative impact on the local casinos' operations.

The city's gaming concentration is balanced somewhat by the presence of Barksdale Air Force Base, by far the city's largest single employer. The base has been expanding with a 10-year federal appropriation for the expansion of the Global Strike Command. Though future operations could potentially be negatively affected by federal cost savings initiatives, Airforce-proposed enhancements, including elevation of the base's command to a four-star general from the current three-star, could lead to growth in the near term.

The city's unemployment rate in 2014 (annual average using preliminary figures for December 2014) was 5.4%, a decline from 6% in 2013. It remains below comparable state (5.5%) and national (6.2%) averages. Various local economic development projects underway are expected to positively benefit the economy in the near term. For example, Computer Sciences Corporation will be adding about 1,000 positions at its new facility, currently under construction at the city's Cyber Innovation Center research park.

City income indicators are generally above or close to state averages, but below average compared to national figures. Similarly, wealth levels are higher than state figures but below national averages. The city's per capita personal income is about 85% of the national average. The poverty rate is 18%, as compared to 19.1% for the state and 15.4% for the nation.

AVERAGE DEBT RATIOS; HIGH CARRYING COSTS

Overall debt ratios are average (\$3,308 per capita and 4.4% of market value in 2013) and should remain so, with no further near-term debt issuance plans and average amortization. Debt service is above average at as a percentage of governmental spending is high at about 13% of fiscal 2013 governmental spending.

The city has two single-employer (SE) pension plans and participates in three of the state of Louisiana's four cost-sharing multi-employer (CSME) plans. Total pension payments by the city for the local and state plans were high, at about 16% of governmental spending in fiscal 2013. Combined carrying costs, including pension ARC, debt service costs and modest OPEB pay-go payments, are also high at about 30% of fiscal 2013 governmental spending.

The local SE plans are closed to new participants, and each of their funded positions has improved significantly due to recent over-funding of the ARC. The city anticipates the plans will be fully funded by 2018. Contributions to the state-wide plans have increased in recent years, driven by their under-funded positions. However, the city reports recent stabilization, with required payments decreasing this year, which should reduce carrying costs.