Troy City Board of Education, AL Revenue Bond Rating Placed On CreditWatch Negative

Stocks and Financial Services Press Releases Wednesday June 13, 2018 09:25
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 the Public Educational Building Authority of the City of Troy, Ala.'s series 2011 educational facilities revenue bonds, issued on behalf of Troy City Board of Education, on CreditWatch with negative implications given the discovery of 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 bonds within the next 90 days," said S&P Global Ratings credit analyst Karolina Norris.

The analytic error began with our review in June 2012, when we incorrectly viewed the appropriation risk for the bonds as mitigated. Beginning with 2012 and in each subsequent review, we rated the bonds based on our "Special Tax Bonds" criteria, published on June 13, 2007 on RatingsDirect, when we should have analyzed them under our "Appropriation-Backed Obligations" criteria, published June 13, 2007, because the bonds are subject to annual appropriation risk. During the CreditWatch period, we will reevaluate the bonds in accordance with the "Annual Appropriation Obligations" section of our "Issue Credit Ratings Linked to U.S Public Finance Obligors' Creditworthiness" criteria, published Jan. 22, 2018, and assess the annual lease renewal risk.

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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