Bangkok--13 Mar--Standard & Poor's
Standard & Poor's Ratings Services has raised its underlying rating (SPUR) on Snowflake Unified School District No. 5 (Navajo County), Ariz.'s GO debt to 'A' from 'BBB' based on our approach in reducing the significance of a community's size and rural location in our analysis, when appropriate. (Please see "Does Bigger Always Mean Better? Sizing Up The Impact Of Size On Municipal Ratings" and "Location, Location, Location: What Does It Mean for My Community's Rating?," both published April 22, 2008, on RatingsDirect.)
At the same time, Standard & Poor's assigned its 'A' rating to the district's series 2009 school improvement bonds. The outlook is stable.
"In our opinion, the rating also reflects the district's economic base that has seen good growth in the past five years," said Standard & Poor's credit analyst Timothy Barrett. Also supporting the rating are increases since fiscal 2002 in average daily membership (ADM), which the state uses to calculate state funding, thereby increasing general fund revenues; and a low debt burden with limited additional capital needs.
The rating is constrained by potential fiscal pressures due to midyear revenue cuts by the state in fiscal 2009 with additional state revenue cuts expected for fiscal 2010 in addition to low per capita income levels.
The stable outlook reflects Standard & Poor's expectation that the district will continue to maintain adequate reserve levels in the face of challenges at the state level in addition to the prospect that Catalyst Paper Inc., a leading employer, could reduce its workforce. Should Catalyst shut down its operations, Standard & Poor's expects that the district will have adequate time to respond to any resulting financial or operational challenges.
Complete ratings information is available to 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; select your preferred country or region, then Ratings in the left navigation bar, followed by Find a Rating.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Timothy Barrett, New York (1) 212-438-6327
Sussan Corson, New York (1) 212-438-2014