Bangkok--6 May--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'AA' long-term rating, with a stable outlook, to Columbia, Multnomah and Washington Counties School District (Scappoose) No. 1J, Ore.'s series 2009 general obligation (GO) bonds. In addition, Standard & Poor's assigned its 'A+' school issuer credit rating (ICR), with a stable outlook, to the series.
The 'AA' long-term rating reflects the district's eligibility for, and participation in, the Oregon School Bond Guaranty Program and is equivalent to the state's GO rating. The GO bonds' underlying security, which is the basis for the school ICR, consists of a pledge of the district's full faith credit and resources, and a covenant to levy ad valorem property taxes without limitation as to rate or amount.
In our opinion, the district's primary credit strengths are its Portland-area economic base that shows favorable income and wealth indicators, stable weighted average daily membership (ADMw), demonstrated willingness to adjust budgets to improve reserves after the prior recession, and low debt burden.
Constraining credit quality is the district's history of weak financial performance earlier in the decade and a projected decline of its available balances concurrent with recent and projected state aid cuts.
Officials will use proceeds to fund the relocation of an elementary school and expansions and upgrades of existing facilities to improve energy efficiency, among other goals.
"We believe that the district's strong available general fund balance positions it to weather what we think will continue to be a difficult state funding environment," said Standard & Poor's credit analyst Chris Morgan. "We also think that the district's available balances may decline, but will remain at least at good levels."
Located 30 miles northeast of downtown Portland, the district serves what is primarily a bedroom community for the larger region. ADMw has fluctuated around 2,400 students in recent years and based on its most recent demographic analysis, management does not anticipate a significant change in its student population during the next five years.
RELATED RESEARCH
-- USPF Criteria: "GO Debt," Oct. 12, 2006
-- "Key General Obligation Ratio Credit Ranges — Analysis Vs. Reality," April 2, 2008
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:
Chris Morgan, San Francisco (1) 415-371-5032
Le T Quach, San Francisco (1) 415- 371-5013