OREANDA-NEWS. S&P Global Ratings lowered its long-term rating to 'BB-' from 'BB' on Legacy Traditional School (LTCS; Queen Creek and Casa Grande Campus Project), Ariz.'s series 2013 debt, issued by the Industrial Development Authority of the Town of Florence Inc. The outlook is stable.

"The lowered rating reflects our view of the school's unusual and highly inter-related governance structure, which we believe adds significant credit risk to the organization," said S&P Global Ratings credit analyst Jessica Matsumori. "In addition, a for-profit, related company was also formed and contracted by the school to provide services related to the construction of upcoming campuses. While management asserts this arrangement will save it development costs, anindividual of the school's executive team is an owner of this company and receives additional financial benefit from the contract, which we view to be a significant conflict of interest," Ms. Matsumori added.

The charter schools utilize a direct instructional model from kindergarten to eighth grade (K-8), focusing on reading, writing, and math with emphasis on music, citizenship, and physical education. The charter was originally granted to LTS on June 21, 2006, with operations beginning in fall 2007 at its Maricopa campus. LTS schools now includes nine campuses currently in operation with additional expansion plans going forward including the possible addition of campuses in other states.