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3/52015 Fitch Ratings I Press Release FitchRatings Tagging Info Fitch Affirms South Bend Redevelopment Authority, IN's Lease Revenue Bonds at 'AA+'; Outlook Stable Ratings Endorsement Policy 05 Mar 2015 9.23 AM (EST) Fitch Ratings-New York-05 March 2015. Fitch Ratings affirms the 'AA+' rating on the following South Bend Redevelopment Authority, Indiana's(the authority) bonds. --$3.6 million taxable lease rental revenue refunding bonds, series 2011A (College Football Hall of Fame Project), --$1.4 million lease rental revenue refunding bonds, series 2011 B (Century Center Project), --$1.9 million lease rental revenue refunding bonds, series 2009 (Morris Performing Arts Center). In addition, Fitch affirms the 'AA+' rating on the city of South Bend's(the city) implied unlimited tax general obligation (ULTGO) bonds. The Rating Outlook is Stable. SECURITY The lease revenue bonds are payable from semiannual lease payments payable to the trustee two days prior to debt service payment on the bonds. The lease payments are secured by an ad valorem tax levied by the South Bend Redevelopment Commission (the Commission), on all taxable property in the City of South Bend Redevelopment District, an area coterminous with the city. Lease payments are not subjectto annual appropriation. If the leased property is damaged or destroyed,the Commission shall abate the lease payments for the period of time the leased property is unftfor use or occupancy. To mitigate the abatement risk,the Commission is required to carry physical loss insurance equal to the greater of 100% of the replacement cost of the property or amountto redeem the outstanding bonds and rental interruption insurance equal to two years. The leased properties consist of the College Football Hall of Fame, the Morris Performing Arts Center, and the Century Center Complex. KEY RATING DRIVERS SOLID RESERVES: The city's sound financial position is characterized by strong reserve levels and proactive managementthat has successfully navigated the reduction in property taxes caused by state property tax reform. Expenditure cuts combined with the implementation of local income taxes have put operations on firm ground. ECONOMY BENEFITS FROM UNIVERSITY PRESENCE.The close proximity of the University of Notre Dame provides economic stability, but the city continues to face ongoing challenges such above-average unemployment and poverty levels.Although improving, these levels are still above state and national averages. MANAGEABLE DEBT PROFILE.Above-average amortization, moderate debt ratios, and limited future debt plans are offset by weakly-funded pension plans. LEASE AND ULTGOON PAR: Fitch believes that insurance provisions sufficiently mitigate abatement risk to https://www.fitchratings.com/creditdesk/press_releases/detail.cfm?print=1&pr_id=980802 1/4