Eureka School District 44-1, SD Debt Rating Lowered To #A-# From #AA-# On Application Of Outlook Negative

Stocks and Financial Services Press Releases Thursday March 8, 2018 11:39
CENTENNIAL--8 Mar--S&P Global Ratings

CENTENNIAL (S&P Global Ratings) March 7, 2018--S&P Global Ratings lowered its rating to 'A-' from 'AA-' on Eureka School District 44-1, S.D.'s limited-tax capital outlay certificates, based on the application of its Issue Credit Ratings Linked to U.S. Public Finance Obligors' Creditworthiness criteria, published Jan. 22, 2018, on RatingsDirect. The outlook is negative.

We had previously rated the certificates under our "Special Tax Bonds" criteria, which the "Ratings Linked" criteria has fully superseded.

"The negative outlook reflects our view of the district's weak recent operational performance and consecutive years of deficit spending that led to a substantial decline in general fund reserves," said S&P Global Ratings credit analyst Kaila Spalinger. "In addition, the negative outlook reflects our expectation of increasing fixed costs related to salaries and benefits, resulting in budgetary pressure going forward."

Additional weaknesses include our view of the district's:
  • Merely adequate income indicators,
  • Nominally low reserve levels, and
  • Moderate per capita overall net debt burden and carrying charges.
Offsetting the above weaknesses is our view of the district's:
  • Extremely strong market value per capita levels resulting from highly valued farmland, and
  • Stable to growing enrollment, which drives revenues under the state funding formula.

We could lower the rating if the district's reserves decline to levels no longer consistent with those of similarly rated peers, or if we otherwise believe that the symptoms of structural imbalance apparent in its operating budget are inadequately addressed, increasing the likelihood of ongoing pressure on reserves and liquidity through the medium term. The negative outlook therefore reflects that there is at least a one-in-three chance that we could lower the ratings in our one-year outlook horizon. However, we could revise the outlook to stable in the near term if budgetary performance stabilizes and the district maintains strong reserve levels.

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.


Latest Press Release

KTC invites members to enjoy shopping with worthwhileness and special privileges at Osaka Japan.

Miss Sudchavee Banjobdee, Senior Manager – Credit Card Business, "KTC" or Krungthai Card Public Company Limited,jointly with Miss Tharinee Wongwattanun, Senior Marketing Manager, JCB International (Thailand) Company Limited, invite KTC JCB PLATINUM...

New Accenture Study Forecasts End to #Lucrative Inefficiencies for $1 Trillion Capital Markets Industry as It Adapts to the Digital Age

Wealth and asset managers generate most of the industry's profits but struggle to find scale efficiencies and are highly exposed to squeeze scenarios A new study from Accenture (NYSE: ACN) shows how the capital markets industry can wring out historical...

UMITRON secures US$2 million project funding from the Inter-American Development Bank to deliver IoT and AI technology to drive growth of sustainable aquaculture in Lake Titicaca, Peru

UMITRON PTE.LTD. (Singapore, Co-founder/Managing Director, Masahiko Yamada) in cooperation with Abaco (Cooperativa de Ahorro y Credito) and its subsidiary Piscis (Piscifactorias de los Andes) has been approved for US$2 million project funding to improve...

Photo Release: KBank wins Best Private Bank in Thailand 2018 award on the global stage

Mr. Jirawat Supornpaibul, Private Banking Group Head, recently represented KBank to receive the "Best Private Bank in Thailand 2018" award at the PWM/The Banker Global Private Banking Awards, organized by The Banker Magazine. It is the 24th best private...

Fitch Affirms BAFS at #A+(tha)#; Maintains Negative Outlook

Fitch Ratings (Thailand) Limited has affirmed Bangkok Aviation Fuel Services Public Company Limited's (BAFS) National Long-Term Rating at 'A+(tha)' and maintained Negative Outlook. Fitch has also affirmed BAFS's National Short-Term Rating at...

Related Topics