Bangkok--28 Oct--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'AA+' standard long-term rating to King County School District No. 415 (Kent), Wash.'s $31.861 million series 2008 unlimited-tax general obligation (GO) bonds. In addition, Standard & Poor's assigned its 'AA-' issuer credit rating (ICR) to the district. The outlook is now positive based on the district's strong income indicators and access to the broad Seattle metropolitan area employment base.
The issuer credit rating also reflects the district's currently strong general fund balance, which provides some financial flexibility to develop and implement budget balancing measures while staying within its reserve policy to maintain a minimum of 5% of operations in the unreserved, undesignated general fund balance. The rating also reflects the district's low overall net debt burden as a percent of market value and rapid debt amortization.
The 'AA+' rating on the district's bonds is based on Washington State's full faith and credit pledge, which secures qualified voter-approved school district GO debt. An unlimited ad valorem tax pledge, along with the district's full faith and credit GO pledge secures the bonds.
The enhancement rating's stable outlook reflects the outlook on the Washington School Bond Guaranty Program.
"The positive rating outlook reflects management's acknowledgement and identification of the long-term budget gap and its preliminary steps toward developing budget reductions, as well as the district's stated commitment to maintaining the board's minimum 5% reserve policy," said Standard & Poor's credit analyst Misty Newland. "The outlook and rating could be adjusted downward if the 5% reserve policy is not maintained," said Ms. Newland.
King County School District No. 415 encompasses 73 square miles in King County, includes most of the City of Kent, and serves a population of about 155,000. The district, which is the fourth largest in the state, provides K-12 education to approximately 26,000 full-time equivalent students. Recent enrollment growth trends have been essentially flat, which management expects will continue. Median household effective buying incomes are strong at 123% of the nation's level. Assessed value growth has been robust, including an 11% increase for fiscal 2009 to reach $20.6 billion.
Complete ratings information is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, 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; select your preferred country or region, then Ratings in the left navigation bar, followed by Credit Ratings Search.
Media Contact:
Edward Sweeney, New York, (1) 212-438-6634
[email protected]
Analyst Contacts:
Misty Newland, San Francisco (1) 415-371-5073
Chris Morgan, San Francisco (1) 415-371-5032