Bangkok--26 Oct--Standard & Poor's
Standard & Poor's Ratings Services raised its underlying rating (SPUR) on Castro Valley Unified School District, Calif.'s general obligation (GO) debt one notch to 'AA-' from 'A+' and its SPUR on the district's certificates of participation (COPs) debt one notch to 'A+' from 'A' based on its opinion of the district's strong reserve position and continued ability to maintain strong reserves despite revenue pressures. The outlooks are stable.
Other rating factors include Standard & Poor's opinion of the district's:
Participation in the San Francisco Bay Area economy with accessibility to the San Francisco, Silicon Valley, East Bay, and San Ramon Valley employment bases;
Very strong wealth and income indicators; and
Low overall debt burden.
Offsetting the foregoing strengths, in part, is Standard & Poor's opinion of the district's limited revenue-raising flexibility due to the state per pupil equalization funding formula.
"We believe the district's economic base will likely remain strong," said Standard & Poor's credit analyst Lisa Schroeer. "We also think management will likely manage operations during a period of declining state support through budgetary adjustments."
An unlimited ad valorem tax levied on taxable property in the district secures the bonds. The county's board of supervisors has the power and obligation to levy these taxes at the district's request for bond repayment. The county is required to deposit such taxes, when collected, into the bonds' debt service fund.
The rating on the COPs also reflects Standard & Poor's view of lease payments subject to annual appropriation.
In Standard & Poor's opinion, debt levels remain stable. As of fiscal 2009, the district's debt outstanding was $89 million, or, in Standard & Poor's view, a low 1.4% of market value, or a moderate $1,888 per capita. Furthermore, the debt service carrying charge remained, in Standard & Poor's view, a low 6% of expenditures in fiscal 2009.
RELATED CRITERIA AND RESEARCH
USPF Criteria: Key General Obligation Ratio Credit Ranges — Analysis Vs. Reality, April 2, 2008
USPF Criteria: GO Debt, Oct. 12, 2006
USPF Criteria: Appropriation-Backed Obligations, June 13, 2007
Complete ratings information is available to RatingsDirect subscribers on the Global Credit Portal at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
Media Contact:
Fabienne Alexis, New York (1) 212-438-7530,
[email protected]
Analyst Contacts:
Lisa Schroeer, Charlottesville (1) 434-220-0892
Michael P Taylor, New York (1) 212-438-1458