Standard & Poor's Ratings Services said that it lowered its long-term rating to A-minus from A on Will County School District No. 81 (Union), Ill.'s general obligation bonds.
The outlook is stable.
"The downgrade reflects our view of the district's recent history of deficits in its combined educational and operations and maintenance (O&M) fund," said Standard & Poor's credit analyst Lin Johnson, "as well as its weak cash liquidity, with the anticipated use of external short-term borrowing." Another factor is the district's negative cash balance in the combined educational and O&M fund in fiscal 2012.
Partly offsetting the above credit factors are the district's: participation in the Chicago metropolitan area economy with access to Joliet; very strong incomes and extremely strong market value per capita; and moderate overall net debt burden as a percentage of market value and rapid amortization.
The district's GO bonds are secured by revenue from the district's unlimited ad valorem tax GO pledge.
The kindergarten-through-8th grade district serves a population of about 1,500 in a portion of the southeast side of Joliet and a small portion of New Lenox, about 42 miles southwest of Chicago.
"The stable outlook reflects our anticipation that the district will return to structural balance in fiscal 2013 and maintain what we consider 'good' cash balances in its combined educational and O&M fund in fiscal years 2013 and 2014," added Johnson.
