McLean County Community Unit School District No. 3 (Tri-Valley), IL GO Debt Raised To #AA# On Positive Operations

Stocks and Financial Services Press Releases Wednesday May 30, 2018 09:28
CHICAGO--30 May--S&P Global Ratings

CHICAGO (S&P Global Ratings) May 29, 2018--S&P Global Ratings has raised its long-term rating and underlying rating (SPUR) on McLean County Community Unit School District (CUSD) No. 3 (Tri-Valley), Ill.'s general obligation (GO) debt to 'AA' from 'AA-'. At the same time, S&P Global Ratings assigned its 'AA' rating to the district's series 2018A GO school bonds and series 2018B taxable GO school bonds. The outlook is stable.

"The upgrade reflects our assessment of the district's return to positive operations and the strengthening of its available reserves to what we consider a very strong level," said S&P Global Ratings credit analyst John Kenward.

The district's unlimited ad valorem property taxes secure the series 2018A and 2018B bonds. It plans to use $8.75 million of the 2018A bond proceeds to fund capital projects and the remaining amount to refund and restructure existing debt to maintain a constant debt service rate. The new money portion of the 2018A bonds represents the first issuance of $15 million of debt approved by voters in March 2018. The district plans to use the 2018B proceeds to refund and restructure additional existing debt to maintain a constant debt service rate.

The ratings reflect our view of the district's:
  • Participation in the diverse economy of the Bloomington-Normal metropolitan statistical area (MSA);
  • Very strong incomes and extremely strong market value per capita;
  • Very strong operating cash reserves, including working cash; and
  • Moderate debt burden.

The stable outlook reflects our opinion management will likely take the necessary steps to maintain at least balanced operations most years and very strong operating cash reserves. Therefore, we don't expect to change the ratings during the two-year outlook period. The district's participation in the Bloomington-Normal MSA's diverse economy lends additional stability to the ratings.

We could lower the ratings if the district doesn't maintain balanced operations, resulting in a substantial drop in operating cash reserves.
We could raise the ratings if future market value growth substantially decreases the debt burden, while the district maintains its very strong cash reserves and income levels.

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