At the most recent Olentangy Board of Education meeting, school officials didn’t know yet whether the district had been assigned a higher bond rating, but they seemed confident about their trip to Wall Street.
“We’ve got a chance,” was the prevailing opinion. Turns out, it was correct.
Olentangy Local Schools has received the highest possible bond rating, AAA, from Standard & Poor’s Global. The rating service also gave a AAA rating to the bonds to build a fourth high school, which was part of a ballot issue voters approved in March.
“This is a significant accomplishment as only a handful of school districts in the state of Ohio have been assigned the highest rating from S&P Global,” said district Treasurer Brian Kern.
The improved bond rating “is a validation of both the community’s support and the district’s work to manage its finances responsibly,” said Superintendent Mark Raiff in a prepared statement.
The highest bond rating means the district is credit-worthy, and higher-rated bonds pay lower interest rates on newly issued debt.
“In its report, S&P Global noted that the upgrade directly reflects the district’s healthy financial position, strong fiscal management and community support as illustrated by voter approval of the March 2016 permanent improvement, bond issue and operating levy,” states a news release issued by the district.
It’s not unusual for district administration to make a pilgrimage to Wall Street to plead its case. This year was slightly different, however, because joining Raiff and Kern was school board member Kevin O’Brien. Board president David King praised the trio’s efforts, saying it showed cooperation and teamwork.
Standard & Poor’s defines a AAA rating as the district having an “extremely strong” capacity to meet its financial commitments.
“The district’s proximity to the Columbus-area economy and employment base lends stability to the rating,” states the S&P report, which was issued on May 26.
Previously, the district had been assigned the next-best rating, an AA+, for several years. That rating meant the district had a “very strong” ability to meet financial commitments. Going down the line, AA, AA-, A+, A, A- are all considered as strong.
The next tier of ratings are BBB+, BBB, BBB-, which is considered adequate; and BB+, BB, BB-, which is less vulnerable; B+, B, B-, which is vulnerable. Other tiers are: CCC, CC, C, which are vulnerable; and D, where one or more financial obligations have yet to be paid.
Gary Budzak may be reached at 740-413-0904 or on Twitter @GaryBudzak.