Standard & Poor's Ratings Services said it lowered its school issuer credit rating on Brantley County School District, Ga.'s 2010 general obligation bonds to A-minus from A.

The outlook is negative.

At the same time, Standard & Poor's affirmed its AA-plus long-term rating, with a stable outlook, on the district's series 2010 GO bonds, reflecting the security provided by the Georgia State Aid Intercept Program, which is not affected by the downgrade.

"The downgrade on the ICR reflects what we view as the district's deteriorated general fund reserves and structurally imbalanced operations," said Standard & Poor's credit analyst Apple Lo. "The negative outlook reflects our view of the uncertainty in the district's future financial position," Lo added.

If the district is unable to balance its operations in fiscal 2013, and achieve a positive fund balance as projected, the rating could be lowered further.

The AA-plus long-term rating reflects Brantley County School District's: participation in Georgia's voluntary state aid intercept program; pledge of special purpose local option sales tax (SPLOST); and added enhancements to the authorizing bond resolution.

The ICR reflects the district's: continuous general fund drawdowns and negative fund balance of $16,000 at fiscal year-end 2012; limited underlying economy, with adequate income indicators; and limited revenue-raising flexibility on operation and maintenance.

Brantley County School District's low debt levels, with no plans for additional debt, and sufficient liquidity without the need of short-term borrowing offset, in part, these weaknesses.

The district's full faith and credit GO pledge secures the bonds. Also securing the 2010 bonds are revenues from a countywide 1% SPLOST that voters approved in March 2009.

The stable outlook on the long-term rating reflects the strength of Georgia's state aid intercept structure and the additional security provided by the sales tax and bond resolution enhancements. The negative outlook on the school ICR reflects Standard & Poor's view that there is uncertainty regarding the district's financial results in fiscal years 2012 and 2013.

If the district is unable to balance current year operations and achieve a positive fund balance as projected, S&P could lower the rating. Conversely, it could revise the outlook to stable if the district demonstrates a sustained record of balanced operations and rebuilds the fund balance to its target level.

Brantley County School District is coterminous with Brantley County in southeastern Georgia, which is about 100 miles southwest of Savannah.

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