Standard & Poor's Ratings Services said it lowered its school issuer credit rating on Ann Arbor Public Schools, Mich.'s general obligation bonds three notches, to A-plus from AA-plus.
The outlook is negative.
At the same time, Standard & Poor's affirmed the AA-minus rating on the district's existing GO debt that qualifies for the state program. The outlook for the program rating is positive, reflecting the outlook for the state of Michigan.
"The downgrade is based on our assessment of the district's recent challenges in maintaining financial structural balance, which have resulted in reduced general fund reserves, and a larger-than-expected drop in reserves for fiscal 2014," said Standard & Poor's credit analyst Errol Arne. The negative outlook reflects its view of the district's weakened overall financial profile and uncertainty in the financial plan to restore structural balance.
