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NEWS

Outlook Revised To Stable From Positive On Tax-Secured Debt Ratings Of Local Governments On Deep Economic Contraction


Outlook Revised To Stable From Positive On Tax-Secured Debt Ratings Of Local Governments On Deep Economic Contraction

CENTENNIAL (S&P Global Ratings) April 17, 2020--S&P Global Ratings revised its outlook to stable from positive on certain long-term and underlying ratings on local governments with outstanding tax-secured debt due to heightened risks on various credit factors caused by the COVID-19 pandemic and related recession (see list below).

The outlook revisions to stable from positive reflect our view that previous upward momentum will likely be stunted by the broad challenges facing these organizations due to the COVID-19 pandemic and recession. While we no longer think a higher rating is likely during the outlook period, we consider these local governments' ratings stable at this time. A stable outlook reflects our view that the rating is unlikely to change during the outlook period, which is up to two years.

As described in our article, "An Already Historic U.S. Downturn Now Looks Even Worse," published April 16, 2020, on RatingsDirect, the recession's trajectory is much deeper and faster than previously anticipated. S&P Global Economics now projects that the U.S. GDP will contract by 5.3% in 2020. Though we expect the economy will begin to recover in the second half of 2020, we anticipate that the recovery will be gradual and constrained by some form of continued social distancing as fears persist over the continued spread of COVID-19. Given this rapid and severe economic shock, we believe upward rating movement is unlikely over the intermediate term.

At this time, over 90% of the U.S. population is under stay-at-home restrictions. We believe shelter-in-place and other directives to protect the health and safety of individuals from the community spread of COVID-19 present economic challenges to local governments. Specifically, drops in consumer spending due to social distancing, increased business closures, a drop in oil prices to 18-year lows and unemployment reaching record high levels will continue to present local governments with ongoing pressures. We view the uncertainty on the timing and duration of the spread of the coronavirus throughout the country as a health and safety social risk under our environmental, social, and governance (ESG) factors.

Due to the swift onset of an economic recession and resulting fiscal headwinds across the sector, S&P Global Ratings revised its U.S. public finance sector outlooks to negative as an indication that credit trends, while not immediate, will generate more negative than positive rating actions for the remainder of 2020. For more information, see "All U.S. Public Finance Sector Outlooks Are Now Negative," published April 1, 2020 on Ratings Direct.

The U.S. government's recent passage of the Coronavirus Aid, Relief, and Economic Security Act appropriates $150 billion across all state and local governments to offset costs related to the COVID-19 pandemic and alleviate liquidity pressures. We view this federal government relief as a mitigating factor helping limit the near-term credit and liquidity pressures for many local governments. However, uncertainty remains regarding the timing and sufficiency of these measures and whether there will be any additional state or federal support to local governments.

RELATED RESEARCH

  • An Already Historic U.S. Downturn Now Looks Even Worse, April 16, 2020
  • The COVID-19 Outbreak Weakens U.S. State And Local Government Credit Conditions, April 4, 2020
  • Credit FAQ: The Ratings Process And The COVID-19 Pandemic, April 2, 2020
  • Through The ESG Lens 2.0: A Deeper Dive Into U.S. Public Finance Credit Factors, Feb. 27, 2020

Ratings List
The outlook on all ratings is stable.
Issuer State Current rating
Pima Cnty Unif Sch Dist #6 Marana, AZ Unlimited Tax General Obligation Arizona A
Calexico, CA Lease Appropriation California BBB-
Chawanakee Unif Sch Dist, CA Lease Appropriation California A-
Chawanakee Unif Sch Dist, CA Unlimited Tax General Obligation California A
Chowchilla CA General Fund Pledge California A+
Chowchilla, CA Appropriation Contract California A
Compton Unif Sch Dist, CA Lease Appropriation California A-
Compton Unif Sch Dist, CA Unlimited Tax General Obligation California A
Culver City Redev Agy, CA RPTTF Merged Redev Proj Area Tax Increment and Housing Set Aside Revenues Pending Discontinuance California BBB+
Denair Unif Sch Dist, CA Unlimited Tax General Obligation California A-
Hope Elem Sch Dist, CA Unlimited Tax General Obligation California A
Lake Elsinore Unif Sch Dist, CA Unlimited Tax General Obligation California A+
Moreno Vy, CA Lease Appropriation California A+
Newhall Sch Dist Sch Facs Imp Dist No. 2011-1, CA Unlimited Tax General Obligation California AA-
Oakland, CA General Fund Pledge California AA
Oakland, CA Lease Appropriation California AA-
Oakland, CA Unlimited Tax General Obligation California AA
Oxnard, CA Gas Tax California A+
Oxnard, CA Lease Appropriation California A-
Oxnard, CA Unlimited Tax General Obligation California A
Parlier Unif Sch Dist, CA Lease Appropriation California BBB
Parlier Unif Sch Dist, CA Unlimited Tax General Obligation California BBB+
Placentia, CA Gas Tax California A-
Placentia, CA Lease Appropriation California BBB
San Francisco Comnty Coll Dist, CA Unlimited Tax General Obligation California A+
South Monterey Cnty Jt Un High Sch Dist, CA Unlimited Tax General Obligation California A+
Stanislaus Un Sch Dist, CA Unlimited Tax General Obligation California A+
Yosemite Unif Sch Dist, CA Lease Appropriation California A-
Yosemite Unif Sch Dist, CA Unlimited Tax General Obligation California A
Aspen Fire Prot Dist, CO Lease Appropriation Colorado A+
Aspen Fire Prot Dist, CO Unlimited Tax General Obligation Colorado AA-
Aurora, CO Lease Appropriation Colorado AA
El Paso Cnty, CO Lease Appropriation Colorado AA
Hartford, CT Lease Appropriation Connecticut BB
Hartford, CT Unlimited Tax General Obligation Connecticut BB+
Pompano Beach, FL Lease Appropriation Florida AA-
Pompano Beach, FL Unlimited Tax General Obligation Florida AA
Chicago Brd of Ed, IL Unlimited Tax General Obligation Illinois BB-
Chicago Brd of Ed, IL Unlimited Tax General Obligation and Personal Property Replacement Income Tax Illinois BB-
Chicago Brd of Ed, IL Unlimited Tax General Obligation and State Aid Illinois BB-
Chicago Brd of Ed, IL Unlimited Tax General Obligation, Intergovernment Agreement Revenues, and Personal Property Replacement Income Tax Illinois BB-
Chicago Brd of Ed, IL Unlimited Tax General Obligation, Personal Property Replacement Income Tax, and State Aid Illinois BB-
Chicago Brd of Ed, IL Unlimited Tax General Obligation, State Aid, Intergovernment Agreement Revenues, and Personal Property Replacement Income Tax Illinois BB-
Lake Cnty Comnty Cons Sch Dist #24 Millburn, IL Unlimited Tax General Obligation Illinois A-
McHenry Cnty Comnty Unit Sch Dist #12, IL Unlimited Tax General Obligation Illinois BBB-
St Clair Cnty Twp High Sch Dist #201 Belleville, IL Unlimited Tax General Obligation Illinois A-
Crown Point IN Limited Tax Secured General Obligations Indiana AA-
Munster Sch Twn, IN Limited Tax General Operating Pledge Indiana BB+
Pike Cnty Sch Corp IN Lease Non Appropriation Limited Tax Indiana BBB
Pike Cnty Sch Corp, IN Limited Tax General Operating Pledge Indiana BBB
Portage Twp, IN Limited Tax General Operating Pledge Indiana AA-
Whitestown Twn, IN Limited Tax General Operating Pledge and Indiana Anson South/Maple Grove Cons Econ Dev Area 1 Tax Increment Revenues Indiana AA
Whitestown Twn, IN Limited Tax Non-Appropriation Lease Indiana AA
Plaquemines Parish, LA General Fund Pledge Louisiana A+
Plaquemines Parish, LA General Fund Pledge and State Shared Mineral Resources Tax Louisiana A+
Saco, ME Limited Tax General Operating Pledge Maine AA
Allegany Cnty, MD Unlimited Tax General Obligation Maryland AA-
Fitchburg, MA Limited Tax General Operating Pledge Massachusetts A+
Lynn, MA Limited Tax General Operating Pledge Massachusetts A-
North Attleborough, MA Limited Tax General Operating Pledge Massachusetts AA
Covert Pub Schs Dist #18, MI Limited Tax General Operating Pledge Michigan BBB+
Fenton Area Pub Schs, MI Unlimited Tax General Obligation Michigan A
Michigan Fin Auth, MI 2010D Local Govt Loan Pool Michigan BBB+
Perry Pub Schs, MI Unlimited Tax General Obligation Michigan A-
Utica Comnty Schs, MI Unlimited Tax General Obligation Michigan A-
Wayne Charter Cnty, MI Limited Tax General Operating Pledge Michigan BBB+
Wayne Charter Cnty, MI Limited Tax General Operating Pledge and Hotel and Car Rental Taxes Michigan BBB+
Wayne Charter Cnty, MI Limited Tax Non-Appropriation Lease Michigan BBB+
Anoka-Hennepin Indpt Sch Dist #11, MN Lease Appropriation Minnesota A+
Anoka-Hennepin Indpt Sch Dist #11, MN Unlimited Tax General Obligation Minnesota AA-
Northwoods, MO Unlimited Tax General Obligation Missouri BBB+
Riverview Gardens Sch Dist, MO Unlimited Tax General Obligation Missouri BBB
Carson City, NV Limited Tax General Operating Pledge Nevada AA-
Carson City, NV Limited Tax General Operating Pledge and Consolidated Revenues Sales Tax Nevada AA-
Carson City, NV Limited Tax General Operating Pledge and Gross Receipts Tax Nevada AA-
Atlantic City, NJ Unlimited Tax General Obligation New Jersey BB-
Burlington Cnty Br Comm NJ Guaranteed Pooled Loan Series 2017 New Jersey AA
Burlington Cnty Br Comm, NJ 2002 Guaranteed Loan Pool New Jersey AA
Burlington Cnty Br Comm, NJ 2004 Guaranteed Lease Pool New Jersey AA
Burlington Cnty Br Comm, NJ 2011 Guaranteed Lease Pool New Jersey AA
Burlington Cnty Br Comm, NJ 2012A Guaranteed Loan Pool New Jersey AA
Burlington Cnty Br Comm, NJ 2013 Guaranteed Loan Pool New Jersey AA
Burlington Cnty Br Comm, NJ 2014A-1 Guaranteed Loan Pool New Jersey AA
Burlington Cnty, NJ Legally Available New Jersey AA
Burlington Cnty, NJ Unlimited Tax General Obligation New Jersey AA
Burlington County & Burlington Cnty Br Comm NJ Unlimited Tax General Obligation New Jersey AA
Camden City, NJ Unlimited Tax General Obligation New Jersey BBB+
Clifton, NJ Unlimited Tax General Obligation New Jersey AA-
Englewood, NJ Unlimited Tax General Obligation New Jersey AA-
Hopewell Vy Regl Brd of Ed, NJ Unlimited Tax General Obligation New Jersey AA
Secaucus Brd of Ed, NJ Unlimited Tax General Obligation New Jersey AA-
Upper Freehold Regl Sch Dist, NJ Unlimited Tax General Obligation New Jersey A+
Colonie Town, NY Unlimited Tax General Obligation New York A+
Ellicott Twn, NY Unlimited Tax General Obligation New York A
Franklin Cnty, NY Appropriation Contract New York BBB+
Fulton, NY Unlimited Tax General Obligation New York BBB+
Hamburg Cent Sch Dist, NY Unlimited Tax General Obligation New York A+
Hempstead Twn, NY Unlimited Tax General Obligation New York AA-
Lockport, NY Unlimited Tax General Obligation New York A-
Rockland Cnty, NY Unlimited Tax General Obligation New York A+
Conotton Vy Un Loc Sch Dist, OH Lease Appropriation Ohio A
Tillamook Cnty, OR Unlimited Tax General Obligation Oregon AA-
Altoona Area Sch Dist, PA Limited Tax General Operating Pledge Pennsylvania A+
Cambria Cnty, PA Unlimited Tax General Obligation Pennsylvania BBB
Erie, PA Unlimited Tax General Obligation Pennsylvania A
Lansdale Boro, PA Unlimited Tax General Obligation Pennsylvania AA-
Philadelphia, PA General Fund Pledge Pennsylvania A
Philadelphia, PA Non-Appropriation Lease Pennsylvania A
Philadelphia, PA Unlimited Tax General Obligation Pennsylvania A
St Clair Area Sch Dist, PA Limited Tax General Operating Pledge Pennsylvania A
West Mifflin Area Sch Dist, PA Limited Tax General Operating Pledge Pennsylvania BBB-
Wilkinsburg Boro Sch Dist, PA Limited Tax General Operating Pledge Pennsylvania BBB+
Wilkinsburg Boro Sch Dist, PA Unlimited Tax General Obligation Pennsylvania BBB+
Anderson Cnty Sch Dist #1, SC Unlimited Tax General Obligation South Carolina A+
MIddleton, TN Unlimited Tax General Obligation Tennessee BBB+
Blue Ridge Indpt Sch Dist, TX Unlimited Tax General Obligation Texas A
Petersburg, VA Unlimited Tax General Obligation Virginia BBB-
Jefferson Cnty Fire Prot Dist No. 1 East Jefferson Fire Rescue, WA Limited Tax General Operating Pledge Washington AA-
Snohomish Cnty, WA Limited Tax General Operating Pledge Washington AA+
Thurston Cnty Sch Dist No. 111 Olympia, WA Unlimited Tax General Obligation Washington A+
Campbellsport Vill, WI Unlimited Tax General Obligation Wisconsin BBB+

An Excel workbook containing a list of these rating actions can be downloaded here: https://www.standardandpoors.com/pt_LA/web/guest/article/-/view/sourceId/100043223

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.

Primary Credit Analyst:Andrew Bredeson, Centennial + 1 (303) 721 4825;
andrew.bredeson@spglobal.com
Secondary Contact:Jennifer Boyd, Chicago (1) 312-233-7040;
jennifer.boyd@spglobal.com

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