West Virginia School Building Authority 2017 Bonds Assigned #A+# #AA-# GO Rating Affirmed

Stocks and Financial Services Press Releases Tuesday September 12, 2017 09:09
NEW YORK--12 Sep--S&P Global Ratings

NEW YORK (S&P Global Ratings) Sept. 11, 2017--S&P Global Ratings assigned its 'A+' long term rating to the West Virginia School Building Authority series 2017 capital improvement refunding revenue bonds. The outlook is stable. We have also affirmed our 'AA-' long-term rating and underlying rating (SPUR) on the state's general obligation (GO) debt outstanding, our 'A+' long-term rating and SPUR on its appropriation debt outstanding, our 'A-' long-term rating and SPUR on its moral obligation debt outstanding, and our 'AA-' long-term rating on the West Virginia Municipal Bond Program. The outlook is stable.

The series 2017 capital improvement refunding revenue bonds are limited obligations of the authority. The proceeds of the series 2017 bonds, together with monies currently on deposit in the series 2007A debt service reserve fund, will provide funds to currently refund the outstanding series 2007 of the authority. "The 'AA-' rating reflects our view of the state's challenged economic base that has suffered significant deterioration year over year given global weakness in demand for mineral and ore products," said S&P Global Ratings credit analyst Timothy Little, "and strong rainy day fund balances that provide flexibility to weather temporary revenue shortfalls." Other factors include: Statutory provisions that allow for payment of debt service in the absence of a budget; andDemonstrated willingness and ability to tackle large-scale financial challenges, as evidenced by the progress made in addressing its unfunded pension liability and other postemployment benefits (OPEBs).The state's anemic population growth has been declining since 2012 and stood at 1.83 million in 2016.

The IHS Markit forecast indicates the population will experience ongoing decreases through 2020 as the working age population migrates elsewhere for employment opportunities. "The stable outlook reflects our view of West Virginia's continued strong reserves and demonstrated commitment to addressing its long-term liabilities, including adequately funding its pensions, paying off its workers' compensation fund debt, and direct additional revenues to its OPEB obligation," added Mr. Little.

The outlook additionally reflects our anticipation that state officials will continue to update revenue projections and take further budgetary actions if necessary to offset any further potential revenue shortfalls over the two-year horizon.

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.globalcreditportal.com and at www.spcapitaliq.com. All ratings affected by this rating action can be found on the S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.

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