Bangkok--20 May--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'AA+' long-term rating, with a stable outlook, to North Franklin School District No. J51-162 (Franklin and Adams Counties), Wash.'s series 2009 unlimited-tax general obligation (GO) bonds. In addition, Standard & Poor's assigned its 'A' school issuer credit rating, with a stable outlook, to the series.
The 'AA+' long-term rating reflects the district's eligibility for, and expected participation in, the Washington School Bond Guarantee Program, and is equivalent to the state's GO rating.
In our opinion, the district's primary credit strengths are its recent growth in enrollment, which drives operating revenues under the state funding system, and our belief that a recent expansion of a major employer makes near-term declines unlikely; two consecutive voter approvals for a supplemental operating levy by large margins; and low-to-moderate debt burden.
Constraining credit quality is a history of maintaining merely adequate available balances, coupled with the need to return to voters every two years to renew the supplemental operating levy.
Officials will use proceeds to fund the construction of a new elementary school, a junior high school gym, and additional classrooms.
"We believe the district is actively preparing for a more difficult state aid environment in fiscal 2010," said Standard & Poor's credit analyst Chris Morgan. "The potential for further cuts to state aid, particularly if it affected equalization funding, leads us to our opinion that careful management of financial operations will represent a key credit factor for the foreseeable future, given the district's history of maintaining merely adequate available balances."
One of the largest school districts in the state by geography, the district serves about 7,800 residents in a primarily rural area, located about 30 miles northwest of the approximately 170,000-resident "Tri-Cities" metropolitan area (Kennewick, Pasco, and Richland).
RELATED RESEARCH
-- USPF Criteria: "GO Debt," Oct. 12, 2006
-- USPF Criteria: "State Credit Enhancement Programs," Nov. 13, 2008
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Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Chris Morgan, San Francisco (1) 415-371-5032
Sussan Corson, New York (1) 212-438-2014
Key Contacts:
Americas Media Relations: (1) 212-438-6667
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Americas Customer Service: (1) 212-438-7280
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