Standard & Poor's Ratings Services revised the outlook on its AA-plus rating on Derry Township, Pa.'s general obligation debt and the outlooks on its AA-plus ratings on Derry Township Industrial & Commercial Development Authority's and Derry Township Municipal Authority's GO-equivalent securities, secured by the township, to stable from positive.
The outlook revision reflects Standard & Poor's assessment of challenges beyond the township's control that prevented management from achieving its goal of building general fund balance back to its $4 million policy requirement.
At the same time, the rating service assigned its AA-plus rating and stable outlook to the township's $4.12 million series 2012 GO bonds.
Standard & Poor's also affirmed its AA-plus ratings on the existing debt.
The stable outlook reflects the rating service's opinion of the township's diverse and growing economy.
"Although events outside the township's control prevented it from achieving its goal of rebuilding general fund balance back to its policy level by 2012, we believe management will likely continue its efforts to reach this target over the next few years," said Standard & Poor's credit analyst Linda Yip. "All else being equal, we could raise the rating if management were to replenish fund balance and maintain it at the $4 million policy level. The rating could come under pressure, however, if additional events were to occur that result in a significant reserve deterioration to, what we consider, low or deficit levels. Otherwise, due to management's assessment of when it will likely reach its target, we do not expect to change the rating within the outlook's two-year period."