Standard & Poor's Ratings Services said it lowered its underlying rating to A-minus from A on Wabash County Metropolitan School District, Ind.'s outstanding general obligation debt.
The outlook is negative.
"The lowered rating reflects our view of the district's deteriorated cash position, while the negative outlook is based on the uncertainty around future operations given the already-thin cash reserve position," said Standard & Poor's credit analyst Kathryn Clayton.
Standard & Poor's also affirmed its AA-plus long-term rating and underlying rating (SPUR) on the district's bonds outstanding, which are eligible for and participate in the Indiana State Aid Intercept Program and the qualifying 2x coverage of debt service with state foundation payments. The outlook on the enhancement program rating is stable.
The A-minus underlying rating reflects the agency's view of the district's: stable local economy based on agriculture, manufacturing, and services; good overall economic indicators; and low debt burden, with limited future capital needs.
The preceding credit strengths are partly offset by recent volatility in general fund operations, which caused the cash reserves in the general fund to drop to a negative position in calendar 2013.
