Lindale Independent School District, TX GO Rating Raised To #AA-# On Growing Tax Base, Very Strong Reserves

Stocks and Financial Services Press Releases Tuesday August 8, 2017 09:14
CENTENNIAL--8 Aug--S&P Global Ratings
CENTENNIAL (S&P Global Ratings) Aug. 7, 2017--S&P Global Ratings raised its underlying rating to 'AA-' from 'A+' on Lindale Independent School District (ISD), Texas' general obligation (GO) bonds.

At the same time, we assigned our 'AAA' program rating and 'AA-' underlying rating to the district's series 2017 unlimited-tax refunding bonds. The outlook is stable. Bond proceeds will be used to refund a portion of the district's existing debt for savings.

"The raised GO rating reflects our opinion of the ISD's growing tax base, historical maintenance of very strong reserves, and proactive management of enrollment growth," said S&P Global Ratings credit analyst Joyce Jung.

The long-term rating reflects our view of the district's eligibility for, and participation in, the Texas Permanent School Fund (PSF) bond guarantee program, which provides the security of a permanent fund of assets that the district can use to meet debt service on bonds guaranteed by the program.

The stable outlook on the 'AAA' program rating reflects the strength and liquidity of the Texas PSF. The underlying rating reflects our opinion of the district's general creditworthiness, including its: Access to the Tyler metropolitan statistical area, Good median household income and strong wealth per capita,Very strong general fund reserves, with average reserve level of approximately 30% of operating expenditures in the last four fiscal years; andLimited near-term capital needs.

In our view, the preceding credit strengths are partly offset by the district's limited local economy. The stable outlook on the underlying rating reflects our opinion that the district's conservative budgeting practices and strong property tax collections will likely allow management to maintain its very strong financial reserves.

The outlook is also based on our opinion of the district's continued property tax base growth, which will keep the overall net debt burden moderate due to the district's lack of debt needs during the next two years. We could raise the rating if the tax base continues to expand, increasing wealth and incomes and moderating debt burden to levels comparable to those of its higher-rated peers.

We could lower the rating if the district experiences any substantial economic or financial deterioration. Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria.

Please see Ratings Criteria at www.standardandpoors.com for further information.
Complete ratings information is available to subscribers of RatingsDirect at www.globalcreditportal.com and atwww.spcapitaliq.com.
All ratings affected by this rating action can be found on the S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.

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