Standard & Poor's Ratings Services said Wednesday that it lowered its long-term rating on Oakwood Village, Ohio's general obligation debt to A from A-plus.
"The downgrade is due to sustained, lower general fund reserves," explained Standard & Poor's credit analyst Carol Hendrickson.
At the same time, S&P assigned its A long-term rating to Oakwood's limited tax GO various purpose improvement and refunding bonds, series 2012. The outlook on all the ratings is stable.
The rating reflects the village's: participation in the Cleveland metropolitan area economy; good income and very strong per capita market value levels; and moderate overall debt burden.
These credit strengths are limited by the village's just adequate general fund reserves, which are thin on a dollar basis and measured on a cash basis of accounting, as well as reliance on income tax revenues which are sensitive to economic fluctuations.
Oakwood's limited-tax GO pledge subject to the 10-mill limitation secures the bonds. In addition, the village has pledged special assessments to a portion of the bonds; however, the rating is based on its GO pledge. Bond proceeds will finance various street projects, refund its series 2004 various purpose bonds for interest savings, and retire its series 2012-1 various purpose notes.
Oakwood Village (2010 population 3,667) is in southern Cuyahoga County (AA-plus/stable), about a 30-minute drive south of downtown Cleveland and north of Akron, allowing for access to a large employment base.
"The stable outlook reflects our expectation that the village will maintain at least balanced financial operations and adequate to good cash reserves over the two year outlook horizon," added Hendrickson.