Talladega County Board of Education, AL School Warrant Rating Placed On CreditWatch Negative

Stocks and Financial Services Press Releases Wednesday June 13, 2018 09:29
DALLAS--13 Jun--S&P Global Ratings

DALLAS (S&P Global Ratings) June 12, 2018--S&P Global Ratings placed its 'A+' underlying rating (SPUR) on Talladega County, Ala.'s series 2009 special obligation school warrants, supported by Talladega County Board of Education (BOE), on CreditWatch with negative implications given the discovery of a misapplication of its criteria and an analytic error.

"The CreditWatch action reflects our view that there is at least a one-in-two likelihood that we will lower the rating on the warrants within the next 90 days," said S&P Global Ratings credit analyst Karolina Norris.

In its Aug. 27, 2015 review, S&P Global Ratings incorrectly applied its " Methodology: Rating Approach To Obligations With Multiple Revenue Streams" criteria, published Nov. 29, 2011 on RatingsDirect, and its "Special Tax Bonds" criteria, published June 13, 2007. However, because the 2009 warrants pledge access to all legally available funds of the obligor in addition to revenue from a limited ad valorem tax, these bonds should have been analyzed using our "GO Debt" criteria, published Oct. 12, 2006.

The analytic error occurred in the Aug. 15, 2017 review when the pledge of legally available revenue was not incorporated into the analysis of the warrants. Given the limited nature of the pledged ad valorem tax, we will reevaluate the bonds in accordance with our "Issue Credit Ratings Linked to U.S Public Finance Obligors' Creditworthiness" criteria, published Jan. 22, 2018, during the CreditWatch period.

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.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.


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