LeFlore County Independent School District No. 29 (Poteau), OK 2019 Educational Facilities Revenue Bonds Rated 'A-'

CENTENNIAL (S&P Global Ratings) April 16, 2019--S&P Global Ratings assigned its 'A-' long-term rating to LeFlore County Public Building Authority, Okla.'s series 2019 educational facilities lease revenue bonds, issued for LeFlore County Independent School District (ISD) No. 29 (Poteau). The outlook is stable.
About 35 miles outside of Fort Smith, Ark., the district benefits from a stable economic base, which has generates stable enrollment. This, in turn, has helped the district maintain largely balanced operations and strong cash reserves. Despite the area's stability, we believe the local economy's below-average wealth and income indicators limit upward rating potential.
The district's lease rental payments secure the lease revenue bonds. Revenue for lease payments primarily comes from the district's issuance of general obligation bonds. We rate these obligations one notch lower than the district's general creditworthiness to account for the appropriation risk associated with the lease payments.
"The rating further reflects our view of the district's strong cash reserves, and low debt burden," said S&P Global Ratings credit analyst Katelyn Kerley. "Partially offsetting these strengths, in our view, are the district's below-average, albeit adequate income and market value per capita metrics."
LeFlore County ISD No. 29 (Poteau) serves an estimated population of 11,465.
The stable outlook reflects our expectation that the district will maintain stable operations and at least good reserves for the foreseeable future. Consequently, we do not anticipate changing the rating within the two-year outlook horizon.
We could raise the rating if the local economy materially grows and develops--as evidenced by improved income and market value per capita metrics--and if the district formalizes more of its key financial management policies and practices.
We could lower the rating if the district's operating performance deteriorates such that it reduces reserves to a level that we no longer consider commensurate with those of similarly rated peers.
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