Standard & Poor's Ratings Services said it lowered its long-term rating to A-plus from AA-minus on Cook County School District No. 127.5 (Chicago Ridge), Ill.'s existing general obligation (GO) debt.
The outlook is stable.
"The downgrade reflects large tax base declines that have lowered market value per capita to levels we consider low, and may persist," said Standard & Poor's credit analyst John Sauter.
"The A-plus rating reflects our assessment of the district's stable financial performance, with very strong available reserves and moderate overall debt burden," he added. Another factor is its participation in the deep and diverse Chicago metropolitan economy.
The district's income (adequate) and wealth (low) indicators have each declined considerably, offsetting the above strengths.
The bonds are a GO of the district, secured by unlimited ad valorem property taxes.
Cook County School District No. 127.5 (Chicago Ridge) provides prekindergarten through eighth-grade educational services to an estimated population of 13,520 in southwestern Cook County, approximately 20 miles from downtown Chicago. The district encompasses 1.4 square miles of the village of Chicago Ridge and a small portion of the village of Oak Lawn.
"The stable outlook reflects our expectation that the district will continue to carry very strong cash reserves at or above its formal 55% to 75% policy level," said Sauter. Though tax base declines may persist, the rating agency does not expect it to have a significant effect on the budget given the ability to raise the tax rate. Based on the reserve policy and taxing abilities, it does not expect to lower the rating further within the two-year outlook period. At the same time, it does not anticipate economic improvement at a rate that may lead to the rating being raised within two years either.
