S&P Global Ratings revised the outlook to negative from stable and affirmed its 'A' underlying rating on Grandfalls-Royalty Independent School District (ISD), Texas' outstanding general obligation bonds. At the same time, S&P Global Ratings assigned its 'AAA' long-term rating, with a stable outlook, and its 'A' underlying rating, with a negative outlook, to the district's $7.12 million series 2023 unlimited tax refunding bonds. The outlook revision reflects our view of the district's vulnerable financial management assessment (FMA) characterized by a lack of financial policies and procedures, particularly a failure to address multiyear operating deficits and future expected structural imbalance. We believe this will decrease the district's available reserves, which it typically keeps high and which are critical to credit quality
