...S&P Global Ratings revised the outlook to stable from negative and affirmed its '##-' long-term rating on Michigan Finance Authority's series 2011 public school academy limited obligation revenue and refunding bonds, issued on behalf of Detroit Service Learning Academy (DSLA). The outlook revision is based on our view of stabilization in DSLA's enrollment in the past year coupled with better-than-anticipated financial operations in fiscal 2015, almost break-even operations in fiscal 2016, and projections for fiscal 2017 that include a level of planned capital expenses that we believe will still allow the school to meet its financial covenants. The rating reflects our view of DSLA's slight enrollment increase in fall 2016, positive operations in fiscal 2015, good coverage for the rating in fiscal 2016, and cash on hand in line with the rating. However, the school's practice of relying on short-term state aid note borrowing each year for cash flow is a credit risk and inflates its cash measure,...
