Standard & Poor's Ratings Services said it raised its underlying rating and school issuer credit rating on Brandywine Heights Area School District, Pa.'s insured series 2011A and 2011B limited tax general obligation bonds one notch to AA-minus from A-plus.
The outlook is stable.
This action reflects Standard & Poor's view of the district's: easy access to diverse employment opportunities in nearby Allentown and Reading; good to strong wealth and income; conservative budgeting practices contributing to very strong general fund reserves; and moderate overall debt burden coupled with rapid principal amortization.
Offsetting the aforementioned strengths is Standard & Poor's view of the district's: limited anticipated assessed value growth; slight market value declines; and anticipated higher pension costs.
"The stable outlook reflects our view of the district's proximity to the diverse Reading and Allentown employment centers, coupled with continued maintenance of very strong reserves," said Standard & Poor's credit analyst Scott Nees. "An improving district economy, particularly via a growing tax base and market value per capita, along with maintenance of reserves at a level we consider very strong, could lead to a raising of the rating in the future. Conversely, tax base and market value declines resulting in revenue pressure and increased expenditures, particularly involving the district's pension liability, could lead to a lowering of the rating. However, we do not expect relevant credit characteristics to deteriorate in a way that warrants a lowering of the rating for the next few years."
Brandywine Heights Area School District is located in northeastern Berks County, Pa., about halfway between Reading and Allentown.
