Hammond Local Public Improvement Bond Bank, Ind., Downgraded to BB-Plus by S&P

Standard & Poor's Rating Services said it lowered to BB-plus from BBB-minus its long-term rating on Hammond Local Public Improvement Bond Bank, Ind.'s series 2010A bonds, supported by the city of Hammond.

The outlook is stable.

"The lower rating reflects our lowering the city's issuer credit rating (ICR) to BBB-plus," said Standard & Poor's credit analyst Steffanie Dyer.

"The BB-plus rating reflects the city's moral obligation to replenish the debt service reserve fund, if needed," she added. The moral obligation rating therefore reflects the city's credit characteristics and the risk of nonappropriation by the city council.

Previously the rating was one notch lower than the typical moral obligation differentiation of a full rating category, due to the risks associated with the operations of a new charter school funded by the bond proceeds.

The charter school has been operating for several years mitigating previous concerns on operations, so the BB-plus rating is at the typical one category distinction from the general obligation rating.

The stable outlook reflects the outlook on the Hammond ICR.

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