Moody's Rating

Issue: General Obligation Bonds, Series 2013; Rating: Aa2; Sale Amount: $4,600,000; Expected Sale Date: 12/18/2012; Rating Description: General Obligation

Opinion

Moody's Investors Service has assigned a Aa2 rating to the Town of Carrboro's (NC) $4.6 million General Obligation Sidewalk and Greenways Bonds, Series 2013. The bonds are secured by the town's unlimited ad valorem tax pledge.

SUMMARY RATINGS RATIONALE

The Aa2 rating reflects the town's solid financial position with ample reserves and financial flexibility, its growing tax base supported by substantial institutional presence and minimal debt profile.

Proceeds from the offering will finance various sidewalk and greenways capital improvement projects.

STRENGTHS:

-Stable economy with substantial institutional presence.

-Solid financial position marked by growing reserves and conservative budgeting practices.

-Low unemployment(5.6% October 2012)

CHALLENGES:

- Budgetary adjustments to accommodate increased fixed costs.

WHAT COULD MAKE THE RATING GO UP:

-Significant expansion and diversification of tax base.

WHAT COULD MAKE THE RATING GO DOWN:

-Significant declines in tax base or wealth levels.

-Narrowing of liquidity or General Fund balance.

RATING METHODOLOGY

The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

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Tiphany J. Lee Associate Analyst Public Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Orlie Prince Senior Vice President Public Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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