Bangkok--30 Jan--Standard & Poor's
Standard & Poor's Ratings Services raised its underlying rating (SPUR) on Calexico Unified School District, Calif.'s general obligation bonds to 'A-' from 'BBB+'. At the same time, we raised the SPUR on the district's certificates of participation (COPs) to 'BBB+' from 'BBB'. The outlook is stable.
We also assigned our 'BBB+' long-term rating, and stable outlook, to the district's $6.5 million 2009 refunding COPs.
"We base the upgrade on our view of the district's ability to maintain fund balances above the state mandate through demonstrated budget adjustments in the context of enrollment that has declined for three fiscal years and budgetary stress at the state level," said Standard & Poor's credit analyst Timothy Barrett.
The 'BBB+' rating on the refunding COPs reflects our opinion of the general creditworthiness of the district, and covenant to budget and appropriate lease payments.
"The stable outlook reflects our view of district management's demonstrated willingness and ability to make substantive revisions to its operations to maintain adequate reserves," Mr. Barrett added.
The bonds are secured by the district lease rental payments.
The bonds are being issued to refinance the series 2004 COPs outstanding. Through a lease agreement with the Calexico Unified School District Finance Corp., a California nonprofit public benefits corporation, the school district has leveraged its William Moreno Junior High School and Blanche Charles Elementary School.
The district's general creditworthiness includes, in our opinion, its diverse tax base growth that has seen considerable growth within the past decade; general fund balances that historically have been greater than the state-mandated 3% level; and low per capita debt burden with no additional debt plans for the next three-to-five years.
We believe these strengths are mitigated by a local economy that is dominated by seasonal agriculture employment, leading to high unemployment rates; low income levels on a per capita basis, which is characteristic of border economies; and qualified fiscal 2008 and 2009 budgets.
Calexico Unified School District, which serves a population estimate of 40,480 in Imperial County, is coterminous with Calexico, Calif.
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Media Contact:
Edward Sweeney, New York (1) 212-438-6634, [email protected]
Analyst Contacts:
Timothy Barrett, New York (1) 212-438-6327
David G Hitchcock, New York (1) 212-438-2022