Thursday, July 31, 2008

Standard & Poors rates another junk bond

Standard & Poors is not the best judge of financial management. First there was their ratings of SIV, MBS, CDO, and other derivitives. Now we have Fannie Mae, Freddie Mac, and Olentangy.

* STANDARD & POORS 'UPGRADES OLENTANGY CREDIT RATING TO "AA+"

Standard & Poor’s Rating Services (S & P) has increased Olentangy Local Schools’ credit rating from “AA” to “AA+,” the second highest rating possible. The increased rating means the district will receive a lower interest rate on its bond millagemaking it easier for the district to maintain the existing 8.72 total bond mills target for community members. In Ohio, only one other school district has a higher S & P rating than Olentangy Local Schools.

“This is excellent news,” said Olentangy Board of Education President Scott Galloway. “This is important for our community and is a testimony to the quality financial management this district has demonstrated time and time again. I applaud our Treasurer Becky Jenkins and all staff members for their continued efforts towards making Olentangy Local Schools a sound financial investment for all community members. I also thank our residents for their continued support at the ballot box, a factor which played a significant role in this rating upgrade.”

According to a S & P release regarding the rating, “the upgrade reflects the district’s good management of financial operations and its capital building program during a time of strong enrollment growth, that, coupled with voter support, allowed for maintenance of solid reserve levels over the past few years. The ‘AA+’ rating is also based on access to the deep and diverse Columbus metropolitan area employment base, very strong income levels and extremely strong wealth per capita, good management of the levy cycle and moderate overall net debt burden as a percent of market value” (sic)

“I am thrilled for the district and the community,” said Interim Superintendent Jenny Hooie. “Once again an independent outside organization has recognized the outstanding efforts by Olentangy staff members to effectively provide a high quality education at a reasonable cost to our taxpayers.”

S & P is a worldwide leader in authoritative financial market intelligence. According to www.standardandpoors.com, S & P provides credit ratings and credit risk analysis for approximately $32 trillion of debt issued in more than 100 countries. The higher the S & P rating the lower the risk the organization is for investors, which equates to lower interest rates for the organization seeking the rating. Organizations receive higher ratings by demonstrating strong financial management and performance.

2 comments:

Anonymous said...

I know its killing you that the administration was able to save money through recognized strong fiscal management.

Admit it, there is nothing this district could do outside of dissolve that would satisfy you.

At every turn they have proven you wrong. They have managed the growth, gotten the support of the voters, managed their budget and have been recognized over and over by outside organizations.

All this positive news has got to be killing you.

Anonymous said...

...not to mention Enron, WorldCom and the other meltdowns of the the last several years.

Moodys rejected OLSDs argument to increase our bond rating. I'd like to see their reasoning posted on the district website alongside the S&P propaganda.

It's good that our rating was increased--and any district should regularly try to do so--failure to do this is negligence--but S&P's shallow reasoning was clearly based only on what the OLSD posse gave them to review and there was little, if any, independent research involved.