Standard & Poor's Ratings Services raised its rating on Neshannock Township School District, Pa.'s general obligation debt one notch to AA-minus from A-plus.
The outlook is stable.
The upgrade reflects Standard & Poor's assessment of the district's ability to maintain, what Standard & Poor's considers, its very strong fund balance.
"We believe management will likely continue to make the necessary budget adjustments needed to maintain or improve general fund balance. The current rating reflects our expectation that the district will likely maintain fund balances that we view as high. Due to limited capital needs, we also believe district debt will likely remain moderate," said Standard & Poor's credit analyst Michael Mooney. "At the same time, if fund balance were to decrease materially, we could lower the rating or change the rating outlook to negative. Based on stable underlying economic factors, we do not currently expect to raise the rating over the outlook's two-year period."
Standard & Poor's also assigned its AA-minus rating and stable outlook to the district's $4.225 million series 2014 GO bonds.
The district's full-faith-and-credit pledge secures the bonds. The Pennsylvania State Aid Intercept program, which qualifies the district for an A rating, provides additional bond security. The long-term rating on the district's debt, however, is AA-minus because the unenhanced rating is higher than the program rating. Officials intend to use bond proceeds to current refund the district's series 2009 bonds.
