Standard & Poor's lowered its issuer credit rating on the Aliquippa School District, Pa.'s general obligation debt to BBB from BBB-plus, while keeping a negative outlook.

"The downgrade reflects the ongoing structural imbalances because of the weak local economy and declines in revenues, which have resulted in a deeper negative general fund balance," said credit analyst Linda Yip.

At the same time, the rating agency affirmed its single-A long-term rating and underlying rating on the school system's GO debt, reflecting the its eligibility for and participation in Pennsylvania's aid intercept program.

Standard & Poor's cited a weak local economy with falling population, a somewhat limited property tax base with low incomes and per-capita market valuation levels, significant financial pressure in recent years, and steep debt as a percentage of market value.

The district covers parts of Beaver County, about 20 miles northwest of Pittsburgh. Its serves an estimated 2010 population of 10,360, with a total enrollment of about 1,200 in one elementary school and one secondary school.

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