NEW YORK - Standard & Poor's Ratings Services said it raised its underlying rating (SPUR) and issuer credit rating (ICR) three notches to A-plus from BBB-plus on Gilmer Independent School District, Texas' general obligation (GO) debt. The outlook is stable.
At the same time, S&P affirmed its AAA enhanced program rating on the district.
"The upgrade reflects what we view as conservative management that has consistently produced strong financial results," said Standard & Poor's credit analyst Edward McGlade.
The AAA enhanced rating reflects the security of the Texas Permanent School Fund guarantee.
The A-plus SPUR and ICR reflect the district's limited economy, with some dependent on mineral production; below-average income levels; and some tax base concentration, with exposure to volatility in the oil and gas industry.
Credit strengths include the district's access to larger economic markets; and strong financial performance with a healthy unreserved fund balance.
The stable outlook on the enhanced rating reflects our outlook on the Texas Permanent School Fund guarantee. The stable outlook on the ICR reflects the expectation that the district will maintain its sound financial position. The current strength in the oil and gas industry will help increase total assessed values in the near term, and that sustaining healthy reserve levels will help offset potential economic downturns and fluctuations in AV. Management's informal fund balance policy should limit the extent to which reserves are drawn down to help fund current renovation efforts.
Gilmer Independent School District (estimated population: 12,494) is located in east Texas in Upshur and Camp counties.
