Standard & Poor's Ratings Services said it lowered to A from A-plus its underlying rating and long-term rating on Peoria City School District No. 150, Ill.'s outstanding general obligation debt.
The outlook is negative.
"The downgrade is due to a budget imbalance in the district's general fund and projected deficits," said Standard & Poor's credit analyst Anna Uboytseva. "Our rating action also reflects a large drawdown in reserves in 2014 and anticipated larger drawdowns in 2015 and 2016. Although management is working on reducing the budget, we believe that the budget imbalances will continue into 2016 given the current projections."
The district's unlimited-tax GO pledge secures bonds issued by the district. Lease payments made by the district to the Peoria Public Building Commission secure debt service on the commission's debt. The lease payments that secure payment of debt service on the bonds are secured with the district's unlimited-tax property tax levy.
The district serves an estimated population of 100,100 in Peoria and several smaller adjacent areas.
