Standard & Poor's Ratings Services said it raised its rating on Rincon Valley Union Elementary School District, Calif.'s general obligation debt one notch to AA from AA-minus.

The outlook is stable.

The upgrade reflects Standard & Poor's assessment of the district's steady average daily attendance growth and stable operations, characterized by the maintenance of, in Standard & Poor's opinion, very strong available general fund reserves despite continuing budgetary challenges due to state funding uncertainties.

The stable outlook reflects Standard & Poor's opinion of the district's strong economic indicators, average daily attendance growth, and good management policies. The outlook further reflects the rating service's view of the district's financial flexibility due to its electorate support for parcel taxes.

"We believe management will likely maintain its very strong finances. Therefore, we do not expect to change the rating over the outlook's two-year period," said Standard & Poor's credit analyst Lisa Schroeer.

The rating reflects Standard & Poor's opinion of the district's: access to the San Francisco Bay Area; very strong income and extremely strong wealth; financial flexibility due to electorate-approved parcel taxes insulating it from state funding fluctuations, and low net direct debt with no additional debt plans.

Standard & Poor's believes what it considers the district's below-average debt amortization and susceptibility to state funding level changes somewhat offset these credit strengths.

Unlimited ad valorem taxes levied on taxable property in the district secure the GO bonds.

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