Standard & Poor's Ratings Services said it lowered its underlying rating to A from A-plus on McLean County Community Unit School District No. 7 (Lexington), Ill.'s previously issued general obligation debt.
It also assigned an A long-term rating to the district's series 2013A taxable GO school bonds and series 2013B GO refunding school bonds. The outlook on all of the ratings is stable.
"The rating action reflects our view of the district's continued drawdowns and reliance on working cash fund bonds to make up for shortfalls in its general fund," said Standard & Poor's credit analyst Jennifer Boyd.
The A rating reflects the district's: access to the diverse Bloomington-Normal, Ill., economy; strong income levels and market value per capita; and moderate overall debt burden.
The district will use proceeds from the series 2013A bonds to increase the district's working cash fund in anticipation of needing cash for operating expenses during the next few years. The district plans to use proceeds from the series 2013B bonds to refund its series 2009 GO school bonds, so as to restructure the debt to manage the tax rate and allow the district to pay off the series 2013A bonds quicker.
The stable outlook reflects that the district will continue to work toward balanced operations in its general fund so that it no longer will have to rely on reserves to make up for shortfalls.
