Standard & Poor's Ratings Services said it lowered its long-term rating on Cook County School District No. 156 (Lincoln), Ill.'s existing general obligation debt to A-plus from AA-minus.
The outlook is stable.
"The lower rating reflects the district's weakened economic conditions, including its low market value per capita and adequate but below-average incomes," said Standard & Poor's credit analyst David Smith.
"The A-plus long-term rating reflects our assessment of the district's high debt burden as a percentage of market value," he added, "along with its declining equalized assessed valuation (EAV) and market value per capita."
Offsetting these negative credit factors include the district's participation in the diverse Chicago metropolitan area economy and very strong reserves on a cash basis of accounting.
The district's outstanding bonds are secured by its debt service extension base, which is limited as to amount but unlimited as to rate.
Cook County School District No. 156 provides grades pre-K-8 education to about 6,736 residents of Calumet City, approximately 15 miles south of downtown Chicago in southern Cook County.
"The stable outlook reflects our view that the district will likely maintain its strong level of reserves," said Smith. The agency does not expect to lower the district's rating within the two-year outlook period. However, if the district were to draw down reserves substantially, a lower rating is possible.
While it does not believe a higher rating within the next two years is likely given the district's current economic characteristics, a sustained improvement in EAV and a stronger local economy may lead to a higher rating.
