S&P Global Ratings assigned its 'A+' long-term rating to Underwood Community School District, Iowa's series 2016 general obligation (GO) school refunding bonds. The outlook is stable. The district's full faith and credit unlimited ad valorem tax GO pledge secures the bonds. We understand the bonds are being issued to refund the district's outstanding 2006 general obligation bonds for interest cost savings only. The underlying rating reflects our view of the district's: Very strong income levels and extremely strong market value per capita; General fund reserves at 7.8% of expenditures, which we consider good; and Low net debt as a percent of market value and rapid amortization. Partly offsetting these strengths is the district's recent, albeit slight, use of reserves in
