Bangkok--14 Aug--Standard & Poor's
Standard & Poor's Ratings Services raised its underlying rating (SPUR) on Westside Union School District, Calif.'s outstanding general obligation (GO) bonds to 'AA-' from 'A'. The upgrade reflects our view of the district's successful restoration of its financial cushion to what we consider to be a very strong level following the prior down-cycle in state funding, and its willingness to adjust its budgets during the current period of revenue pressure. In addition, Standard & Poor's assigned its 'AA-' rating to the district's 2009A GO bonds. The outlook is stable.
Additional credit strengths include our view of the district's economic base in the Los Angeles region that shows very strong income and extremely strong wealth indicators, sustained very strong financial position since fiscal 2006, and low-to-moderate debt burden.
Constraining credit quality in our view is a recent declining trend in the district's student population, which correlates with operating revenues under the state funding system.
Unlimited ad valorem taxes levied on taxable property within the district secure the bonds.
We understand that proceeds will fund renovation, construction, and other improvements to capital facilities within the district.
"Although the district has had a harder time budgeting in the past year following a period of strong revenue growth, we expect that the district's recent revisions to its operations will help it to maintain at least strong available reserves as it contends with a challenging state funding environment and anticipated declining ADA levels," said Standard & Poor's credit analyst Chris Morgan.
Located 75 miles north of downtown Los Angeles, the district encompasses a large unincorporated area and western portions of Lancaster and Palmdale. Historically anchoring economic activity is the aerospace industry, including Edwards Air Force Base, and we understand that a significant portion of residents make long-distance commutes to the rest of the Los Angeles region.
RELATED RESEARCH
USPF Criteria: "GO Debt," Oct. 12, 2006
USPF Criteria: "Key General Obligation Ratio Credit Ranges — Analysis Vs. Reality," April 2, 2008
USPF Criteria: "Financial Management Assessment," June 27, 2006
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:
Edward Sweeney, New York (1) 212-438-6634, [email protected]
Analyst Contacts:
Chris Morgan, San Francisco (1) 415-371-5032
Lawrence Witte, San Francisco (1) 415-371-5037
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_ [email protected]
Americas Customer Service: (1) 212-438-7280
[email protected]