Standard & Poor's Ratings Services said it raised its underlying rating on Lancaster County Career & Technology Center Authority, Pa.'s guaranteed lease revenue bonds one notch to A-plus from A.
The outlook is stable.
The upgrade reflects Standard & Poor's assessment of the improving credit quality of the authority's respective 16 member districts.
The rating service also assigned its A-plus long-term rating and stable outlook to the authority's $3.9 million series 2014 guaranteed lease revenue bonds.
The stable outlook reflects Standard & Poor's view of the member school district with the weakest credit characteristics.
"We could raise the rating if all member districts were to maintain credit characteristics above the current rating level," said Standard & Poor's credit analyst Victor Medeiros. "We, however, note that any negative rating pressure on any particular district would not substantially lower the rating on the authority due to the additional security provided by the state intercept program, assuming each district maintains the coverage requirement to participate in the enhancement program."
A pledge of lease rentals payable to the authority by 16 participating school districts secures the bonds. Pursuant to lease terms, each district pledges its full-faith-credit-and-taxing power in connection with its allocated portion of such lease rentals due to the authority.
Lease-rental payments are separate obligations of each district. The districts make payments from their current revenue, including real property tax proceeds. Since each district is responsible for its proportionate share of base rental payments, the long-term rating reflects Standard & Poor's assessment of the credit quality of the pledged revenue stream with the weakest credit characteristics.
