Standard & Poor's Ratings Services said it has lowered its school issuer credit rating on Clinton Central 2009 School Building Corp., Ind.'s (Clinton Central School Corp.) series 2010 ad valorem property tax first mortgage refunding bonds by one notch to A from A-plus.

At the same time, Standard & Poor's has affirmed its AA-plus long-term rating on the issue. The outlook is stable.

"The lowering of the ICR reflects our view of the district's deteriorated financial position, owing to recent, significant general fund drawdowns combined with expenditure reduction measures we consider insufficient," said Standard & Poor's credit analyst John Sauter. "The affirmed AA-plus long-term rating is based on the district continuing to meet our Indiana State Aid Intercept Program rating criteria."

The lowering of the ICR further reflects Standard & Poor's view of the district's: declining enrollment, and moderately high debt levels.

The ICR also reflects Standard & Poor's view of these strengths:  the agriculture- and manufacturing-centered local economy, and good incomes coupled with strong market value per capita.

"The stable outlook on the long-term rating and ICR reflects the strength of Indiana's state aid intercept structure and our expectation that the district will show progress in its attempts to restore balanced operations over the next two years, respectively," Sauter said. "Conversely, if the district continues to draw on its reserves to fund operations, we could lower the ratings."

The district serves 5,316 residents in Forest, Johnson, Kirklin, Michigan, Sugar Creek, and Warren townships and the towns of Kirklin and Michigantown.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.