Standard & Poor's Ratings Services said it lowered its long-term and underlying rating to BBB from A on Denair Unified School District, Calif.'s existing general obligation debt.
The outlook is negative.
"The lowered rating reflects our view of the continued deterioration of the district's financial position, and the district's projection to end fiscal 2013 with a negative general fund balance," said Standard & Poor's credit analyst Li Yang. "The negative outlook reflects our view of the continued uncertainty associated with the district's finances and the possibility of a state takeover by the end of fiscal 2014," Yang added.
Located in central Stanislaus County, the district serves an estimated 6,700 residents across 56 square miles of Denair, a portion of Turlock, and other unincorporated areas. Its location provides residents with access to nearby employment centers in Modesto and Turlock.