OREANDA-NEWS. S&P Global Ratings assigned its 'AA' rating and stable outlook to Islesboro Town, Maine's series 2016 general obligation (GO) bonds.

"We do not expect to change the rating within the outlook's two-year period. We, however, could raise the rating if the town were to improve available reserves further on a nominal basis through consistent positive financial performance and if management were to implement stronger and more-formal financial management policies," said S&P Global Ratings credit analyst Anthony Polanco. "If budgetary performance were to deteriorate, resulting in decreases in liquidity and available reserves below levels we consider nominally low, we could lower the rating."

The stable outlook reflects S&P Global Ratings' opinion of Islesboro's strong economy and very strong budgetary flexibility, coupled with a very strong liquidity profile. S&P Global Ratings believes the town's strong debt profile, with limited additional capital needs, and the rating service's expectation that management will likely maintain its strong budgetary performance further support the rating.

The town's full-faith-and-credit pledge secures the bonds. Although the town is not restricted to a particular revenue source, Islesboro has the power to levy ad valorem property taxes for bond repayment, subject to limitations of the state's LD-1 legislation. Despite limitations imposed by the state levy limit law, S&P Global Ratings did not make a rating distinction for the limited-tax-GO pledge due to the town's flexibility under the levy limit.

Officials will use series 2016 bond proceeds to fund a capital improvement project.