Northwestern Lehigh SD, Pa., GOs Raised to AA-Minus by S&P

Standard & Poor's Ratings Services said it raised its long-term rating, school issuer credit rating and underlying rating to AA-minus from A-plus on Northwestern Lehigh School District, Pa.'s general obligation bonds.

"The upgrade reflects conservative budgeting practices that have yielded general fund surpluses and a significant amount of financial flexibility," said Standard & Poor's credit analyst Hilary Sutton.

At the same time, Standard & Poor's assigned its AA-minus long term rating and ICR to the district's series 2013 GO bonds. The outlook is stable.

The ICR reflects: a largely residential property tax base with strong-to-very strong income indicators and a very strong market value per capita; access to the broader employment base of Allentown-Bethlehem-Easton; very strong total available general fund balance at fiscal 2012 year-end that is bolstered by a sizable committed balance; and moderate debt burden and limited capital needs for the near and intermediate term.

The risk associated with the district's variable-rate obligations, which make up about 30% of its debt profile, constrains the rating.

The district's full faith and credit pledge secures the bonds. Additional security is provided by the Pennsylvania State Aid Intercept Program. Bond proceeds will current refund the district's series 2008 GO bonds.

Located in central eastern Pennsylvania, Northwestern Lehigh School District encompasses a 107-square-mile section of Lehigh County.



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