OREANDA-NEWS. Fitch Ratings has affirmed the 'F1+' rating on the state of Ohio's approximately $491.6 million adjustable rate general obligation (GO) bonds, for which the state provides liquidity upon a failed remarketing. The rating applies to the following GO bonds:

--$50 million GO infrastructure improvement adjustable rate bonds, series 2001B;
--$46.135 million GO infrastructure improvement adjustable rate bonds, series 2003B;
--$37.94 million GO infrastructure improvement adjustable rate bonds, series 2003D;
--$53.76 million GO infrastructure improvement adjustable rate bonds, series 2004A;
--$67 million GO common schools adjustable rate bonds, series 2003D;
--$112.37 million GO common schools adjustable rate bonds, series 2005 A & B;
--$124.41 million GO common schools adjustable rate bonds, series 2006 B & C.

SECURITY
General obligation, full faith and credit of the State of Ohio.

KEY RATING DRIVERS

AMPLE LIQUIDITY: The state's Liquidity Fund has ample liquidity to meet tenders on variable rate debt that has not been remarketed. The fund is conservatively invested in U.S. agency securities, domestic commercial paper, and money market funds. The liquidity portfolio has consistently provided strong coverage of outstanding variable rate debt; the 12-month average of the portfolio provided over 10.6x coverage of debt, reflecting improved general fiscal operations.

HIGH-QUALITY GO RATING: Ohio's 'AA+' GO rating is based on the state's careful financial management, ongoing record of maintaining fiscal balance, and a moderate, rapidly amortizing debt burden, supported by an economy that is steadily, albeit slowly, adding jobs lost in the recession.

RATING SENSITIVITIES

SIGNIFICANT EROSION OF COVERAGE: A significant erosion of coverage through declines in available resources could pressure the rating. Given the very solid historical coverage, Fitch considers this unlikely.

CREDIT PROFILE

The rating reflects the ample liquidity provided by investments in the state treasurer's liquidity account, the strength of the state's general obligation credit, and the procedures in place to insure timely payment of optional tenders of bonds that have not been remarketed.

AMPLE LIQUIDITY
The liquidity account, consisting of high-quality securities with maturities of one year or less, was valued at $5.9 billion as of Aug. 30, 2015. Balances in the liquidity account have notably increased since fiscal year 2009 when the state spent its rainy day fund and drew down other reserves during the recession. Month-end balance in August 2015 provided 11.7x coverage of outstanding variable rate debt; over the recent 12-month period, the minimum ending monthly balance provided 9.2x coverage. When the portfolio is discounted to reflect the immediate availability of funds, coverage in August 2015 declined only modestly to 11.3x, reflecting the highly liquid nature of the portfolio. The investment profile is conservative as the fund is invested in U.S. Treasury and agency securities, highly rated commercial paper, repurchase agreements, and money market funds.

STATE CREDIT QUALITY VERY STRONG

The state's 'AA+' GO rating is based on its generally careful financial management, ongoing record of maintaining fiscal balance, and a moderate, rapidly amortizing debt burden. Debt is supported by an economy that is steadily, albeit slowly, adding jobs lost in the recession. The recession had a widespread impact on the Ohio economy, accelerating a longstanding slump in manufacturing and weighing on the slowly growing service sector. However, the state has recorded consecutive months of year-over-year (y-o-y) job gains since July 2010, largely incorporating gains in the manufacturing sector as well as in the services sectors, offset by continued losses in government employment.

For additional information on the state of Ohio, please see 'Fitch Rates State of Ohio GO Bonds 'AA+'; Outlook Stable' dated Sept. 1, 2015, available at 'www.fitchratings.com'.