CHARLESTON, W.Va. — The executive director of the state School Building Authority told MetroNews Thursday he’s not overly concerned about a cut in the ratings outlook for $260 million in outstanding revenues bonds being used to finance school construction in the Mountain State.
“We’re already bonded,” the SBA’s Mark Manchin said. “We sold our bonds in 2008, 2009 and 2010. We were able to generate over 200-million dollars as a result of that and we’re in.”
Standard & Poor’s Ratings Services put up a red flag recently about the debt because the payoff of the bonds is based on the state Excess Lottery Fund, mainly from racetrack video lottery, which has declined in the past two years. Out of state gambling competition is increasing, which is impacting the state’s racinos.
Manchin said there’s a one-in-three chance the bonds will be downgraded but he’s confident the SBA will be able to pay off the bonds with the $19 million a year in Excess Lottery revenues for years to come.
“Even if there were a downturn it’s not going to impact our present indebtedness,” Manchin predicted. “It won’t change anything.”
The School Building Authority also secures debt with Regular Lottery Funds, which Manchin said are more stable than the Excess Lottery Fund. He said there are plans to sell about $50 million in bonds for school construction in the next few months.
“The Regular Lottery Funds will be utilized over the next eight years to continue to build schools. We still feel comfortable,” Manchin said.