Bangkok--24 Feb--Standard & Poor's
Standard & Poor's Ratings Services raised various debt ratings on 10 school districts in California, one in Washington, and two in Arizona. We also affirmed debt ratings on three school districts in California. In all cases, the resulting outlook is stable. For complete information, see "Financial Management Supports Western U.S. School District Upgrades, But State Aid Cuts Are Likely," published today on RatingsDirect. Click on the link to access the report.
The rating actions were part of our practice of regularly surveilling existing ratings, and they reflect criteria we published in 2008 on the role of size, location, and quantitative factors in our opinions on general obligation and appropriation debt.
"Maintenance of good reserves and planned additional cuts factored into most of the upgrades, providing a financial cushion from what we anticipate will be continued revenue pressure from intensifying state budgetary shortfalls that have at times translated into funding reductions or delays," said Standard & Poor's credit analyst Lisa Schroeer.
As school districts in many western states contend with lower state contributions because of tight state budgets, we believe that the way they respond to budget challenges will represent a key influence on credit quality. Should economic recovery be slow, as many state economists project, school districts will be unlikely to see a return to significant growth in state aid and could see further cuts on a per student basis. The positive ratings actions we've taken on California, Arizona, and Washington school districts reflect our view that these districts have so far met the challenge of a weaker funding environment. We will continue our surveillance and take appropriate rating actions as necessary.
The California school districts that saw upgrades are Big Pine Unified, Chowchilla Union High, Chualar Union Elementary, Duarte Unified, Fortuna Union High, Las Lomitas, Linden Unified, Madera Unified, Midway Elementary, and Yolo County Board of Education. The California school districts that saw affirmations are Brea-Olinda Unified, Forestville Union, and La Habra City. The Arizona school districts that saw upgrades are Cochise County Unified No. 2 (Bisbee) and Yavapai County Unified No. 1 (Prescott). The Washington school district that saw an upgrade is Thurston County No. 3 (North Thurston).
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: Does Bigger Always Mean Better? Sizing Up The Impact Of Size On Municipal Ratings, April 22, 2008
USPF Criteria: Location, Location, Location: What Does It Mean For My Community's Rating?, April 22, 2008
USPF Criteria: Appropriation-Backed Obligations, June 13, 2007
California; Appropriations; General Obligation; General Obligation Equivalent Security; Note; School State Program, Jan. 15, 2010
Arizona; Appropriations; General Obligation, Dec. 23, 2009
Washington; General Obligation, Jan. 7, 2010
The report is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to
[email protected]. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
Lisa Schroeer, Charlottesville (1) 434-220-0892
Gabriel Petek, CFA, San Francisco (1) 415-371-5042
Matthew Reining, San Francisco (1) 415-371-5044
Chris Morgan, San Francisco (1) 415-371-5032
Timothy Barrett, New York (1) 212-438-6327
Key Contacts:
Americas Media Relations: (1) 212-438-6667
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Americas Customer Service: (1) 212-438-7280
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