Standard & Poor's Ratings Services said it lowered its long-term and underlying ratings to AA-minus from AA on Fayette County Board of Education, Ky.'s existing debt.
At the same time, Standard & Poor's assigned its AA-minus long-term rating to Fayette County School District Finance Corp., Ky.'s series 2013 school building revenue bonds, issued for the board. The outlook on all ratings is negative.
"The lowered ratings and negative outlook reflect our view of the district's larger than expected deficit in 2012 and expected deficits in 2013 and 2014, despite currently reporting what we deem a strong level of reserves in an effort to bring reserve levels closer to its 5% fund balance target," said Standard & Poor's Helen Samuelson. "If the district's final results for 2013 result in significantly better than expected results, and subsequent budget gaps are addressed with structural adjustments, we could return the outlook to stable," Samuelson added.
The Fayette County Board of Education system serves roughly 300,000 residents of the Lexington-Fayette County Urban Government in Kentucky.