Indy School’s Failing Grade

Standard & Poor’s downgraded to AA-minus from AA its long-term and underlying rating on an Indianapolis-area school district due to a decrease in general fund reserves.

The Metropolitan School District of Pike Township serves more than 11,000 students in northwest Indianapolis. Its strengths include its location as well as strong financial management and a moderate debt burden, analysts said.

Offsetting the credit’s strength is the district’s merely adequate general fund balance on a cash basis.

Standard & Poor’s assigned a AA-plus rating to an upcoming bond issue based on the district’s participation in the Indiana state aid intercept program.

Proceeds from the bonds will be used to build a new elementary school building.

“We expect that the district will make necessary adjustments to maintain at least adequate general fund reserves,” analyst Carol Hendrickson said in a news release on the downgrade.

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