Madison County, Ga., School District last week became the first issuer in the state to benefit from a program that guarantees participants an A rating from Standard & Poor's.

The program, worked out between Georgia and the rating agency, requires participating school districts to pledge state aid payments to cover any debt-service shortfalls on general obligation bonds. In return, the district is awarded a minimum A rating from Standard & Poor's.

For Madison County's school district, the rating will apply to a $5.6 million offering of series 1991 general obligation bonds. The district does not have any other debt outstanding.

In establishing the credit enhancement program, Georgia joins 13 0ther states -- including Pennsylvania, New York, Colorado, Texas, and Virginia -- that have put together similar arrangements, according to Kathy Quail, an assistant vice president at Standard & Poor's. The programs are generally targeted to school districts to help them gain access to the credit markets or reduce borrowing costs by providing additional security to the underlying credit.

"These programs have proved to be a very successful for local issuers," Ms. Quail said.

Georgia's initiative was authorized by recently passed legislation. Administrative details were developed by the state auditor, G.W. Hogan.

The auditor's guidelines specify that a participating district must agree to notify the state's Board of Education at least two weeks in advance if it does not have enough money in a sinking fund to cover an upcoming interest or principal payment. The board would then transfer to the bond issue's paying agent sufficient funds from the district's state and appropriation to cover the shortfall.

In order to be eligible for the program, a district must be able to count on annual state aid at least equal to maximum future annual debt service. In the case of Madison County, annual state aid provides 17 times coverage on annual debt service.

A spokesman for the rating agency said it could withdraw a participating district's A rating if the state's current credit rating slips or if its commitment to education falters.

Georgia's $4.0 billion of general obligation debt is rated AA-plus by Standard & Poor's and Aaa by Moody's.

Georgia's State Transportation Board, which oversees $1 billion a year of road building projects, last Thursday unanimously elected Wayne Shackelford as its commissioner.

Mr. Shackelford, Gov. Zell Miller's handpicked successor to Hal Rives, will take over management of the board when Mr. Rives retires Oct. 31. The former developer and Gwinnett County official has said he would extend the board's authority to cover mass transportation and air and sea ports, as well as traditional road projects.

The election of Mr. Shackelford also marks a major victory for Gov. Miller, who had opposed Mr. Rives advocacy of an increase in state gasoline taxes.

"I was confident that if the DOT board members had the opportunity to get to know Wayne Shackelford as well as I have come to know him, they would see that he is a highly qualified and capable administrator," said Gov. Miller.

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