Standard & Poor's Ratings Services said it raised its long-term rating on Piqua City School District, Ohio's unlimited-tax general obligation bonds to AA-minus from A-plus.
The outlook is stable.
"The upgrade reflects strengthening of available reserves and projections indicating that very strong fund balances will be sustainable," said Standard & Poor's credit analyst Carol Spain.
"The rating reflects our view of the district's very strong available general fund reserves," she added, "and moderate overall debt burden."
Other factors include its: local economy based on manufacturing and agriculture, with access to jobs in Dayton; diverse revenue sources, including property taxes, income taxes, and state aid; and history of strong community support for district tax levies.
The district's below-average income levels partially offset the above strengths.
The district's unlimited GO pledge secures the bonds.
Piqua City School District is on Interstate 70 in Miami County and encompasses 55 square miles.
"The stable outlook reflects our expectation that the district will likely take the necessary steps to maintain very strong reserves," added Spain. It also reflects that the local economy will likely remain stable and management's indication the district has no additional debt plans over the two-year horizon.
While the district is currently projecting surplus results, should its financial position deteriorate markedly, the rating could be lowered. Upward rating potential would depend on substantial strengthening of economic indicators.
