S&P Global Ratings lowered its underlying rating two notches to 'BBB+' from 'A' on Grandfalls-Royalty Independent School District (ISD), Texas' outstanding general obligation bonds. The outlook remains negative. The downgrade reflects significant and sustained multiyear operating deficits and management's inaction to address the structural imbalance, which decreased reserves to a nominally thin $1.4 million in fiscal 2024, with an additional deficit anticipated for 2025. The negative outlook reflects our expectation that there is at least a one-in-three chance we could lower the rating further if additional draws on reserves occur. The rating reflects the application of our " Methodology For Rating U.S. Governments ," published Sept. 9, 2024. Revenue from an unlimited ad valorem tax levied on all taxable property
