Gonzales Independent School District, TX GO Rating Lowered To #A+# On Assessed Value Decline And Consecutive Deficits

Stocks and Financial Services Press Releases Wednesday February 7, 2018 09:25
CENTENNIAL--7 Feb--S&P Global Ratings

CENTENNIAL (S&P Global Ratings) Feb. 6, 2018--S&P Global Ratings lowered its rating on Gonzales Independent School District (ISD), Texas' general obligation (GO) debt to 'A+' from 'AA-'. The outlook is stable.

"The downgrade is based on substantial decline in the district's assessed value and consecutive years of operating deficits, which have led to weakened reserve levels," said S&P Global Ratings credit analyst Belle Wu.

The rating reflect our view of the district's:
  • Very strong market value per capita and adequate income levels;
  • Strong but significantly reduced reserves; and
  • Low to moderate overall net debt with low debt service.

"We believe the susceptibility of the district's assessed value to the volatility from changing mineral values, due to the moderate concentration of oil and gas entities within its tax base, constrain the rating," Ms. Wu added.

An unlimited-ad valorem property tax pledge secures the bonds.

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.capitaliq.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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