Standard & Poor's Ratings Services said it lowered its underlying rating for credit programs to A-minus from A-plus on Atlantic City Board of Education, N.J.'s existing general obligation bonds and placed it on CreditWatch with negative implications.
At the same time, Standard & Poor's affirmed its A school program rating.
"The lowered rating reflects our view of the potential negative implications following the recent history of late monthly property tax payments from the city to the school district and the liquidity risk placed on the district as a result of these late payments," said Standard & Poor's credit analyst Danielle Leonardis. "The ratings' placement on CreditWatch with negative implications further reflects our view of the uncertainty that surrounds the school district following the recent executive order that appointed an emergency manager and emergency manager adviser to Atlantic City. Within the 90-day CreditWatch timeframe, we expect to have further clarity as to how, if at all, the executive order affects the school district's budget and operations," Leonardis added.
The district, with an estimated population of 39,000, encompasses 12 square miles in Atlantic County and is coterminous with Atlantic City.
