Kokomo School Corp. IN GO Debt Rating Lowered To 'A' On Reduced Reserves

CHICAGO (S&P Global Ratings) May 9, 2016--S&P Global Ratings lowered its underlying rating to 'A' from 'A+' on Kokomo School Corp., Ind.'s general obligation (GO) bonds. The outlook is negative. We also assigned our 'A' underlying rating and the negative outlook and 'AA+' long-term rating and stable outlook to the district's series 2016 GO bonds. At the same time, we affirmed our 'AA+' long-term rating on the district's previously rated bonds, reflecting the school corporation's eligibility for, and participation in, the Indiana State Aid Intercept program. The outlook on the program rating is stable. "The downgrade reflects lower reserves than originally expected, the district's failure to comply with its reserve target of 9%-12% of general fund expenditures, and unexpected large

...CHICAGO (S&P Global Ratings) May 9, 2016--S&P Global Ratings lowered its underlying rating to 'A' from 'A+' on Kokomo School Corp., Ind.'s general obligation (GO) bonds. The outlook is negative. We also assigned our 'A' underlying rating and the negative outlook and '##+' long-term rating and stable outlook to the district's series 2016 GO bonds. At the same time, we affirmed our '##+' long-term rating on the district's previously rated bonds, reflecting the school corporation's eligibility for, and participation in, the Indiana State Aid Intercept program. The outlook on the program rating is stable. "The downgrade reflects lower reserves than originally expected, the district's failure to comply with its reserve target of 9%-12% of general fund expenditures, and unexpected large deficits," said S&P Global Ratings analyst Anna Uboytseva. The negative outlook reflects the possibility that the rainy-day fund will be depleted in the near future and the possibility of a further decline in...

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