THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, August 24, 1996 TAG: 9608260358
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: 58 lines
Investors looking for a safe place to plunk down their money should look no further than the Old Dominion.
Moody's Investors Service, one of the major credit agencies that rate corporations and municipalities as bond investments, gave the bonds that Virginia issues its highest rating - AAA.
Standard & Poor's, another well-known credit rating agency, has given Virginia a AAA rating, too.
Moody's has awarded Virginia a AAA rating since 1938, when the state landed that as its initial rating, a spokesman said. Standard & Poor's has awarded Virginia its top rating since 1962.
Eight states boast a AAA credit rating from Moody's: Virginia, Georgia, Maryland, Missouri, North and South Carolina, Tennessee and Utah. S&P has given only five states a AAA rating: Virginia, Maryland, Missouri, North Carolina and Utah.
Moody's top rating is based on the computer industry boom taking place in the state.
Growth of large-scale, high-technology companies in Virginia will ``substantially'' offset the loss of military and federal jobs that the state has faced, Moody's said in a credit report released Friday.
Since spring 1995, Virginia announced four major high-tech ventures expected to pull in up to $10 billion in investment and create 12,000 higher-paying jobs and several thousand secondary jobs.
Those four ventures are Gateway 2000's East Coast computer assembly and distribution facility inHampton, Motorola's semiconductor plant in Goochland County, a joint Motorola/Siemens chip plant in Henrico County and IBM/Toshiba's computer chip plant in Manassas.
``While many of the state's municipalities boast affluent tax bases and low unemployment,'' Moody's said, ``the Virginia government's active pursuit of high-technology investment is expected to enhance their already sound economies by boosting job and tax bases without creating substantial new capital needs.''
High-tech companies already account for 5 percent of the state's 3.4 million labor force.
Moody's report, however, acknowledged some uncertainty regarding the pace of high-tech development.
Demand for computer chips, and thus their manufacturing plants, has slowed from the initial projections cited when these plants were announced. Future demand will determine the growth of those plants and their employment levels.
Motorola has already delayed the opening of its Goochland County plant.
Also, the rapid change in technology could render these plants obsolete.
``However,'' Moody's said, ``the potential gains from this investment substantially outweigh any vulnerabilities.'' ILLUSTRATION: Graphic
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KEYWORDS: BOND RATING by CNB