Clark County Schools Get 2d Negative

Citing a declining tax base, Moody’s Investors Service Monday revised the outlook on Aa2-rated Clark County School District general obligation debt to negative from stable.

The action affects about $5 billion in outstanding debt, as well as Tuesday’s pricing of $128 million in limited-tax general obligation refunding bonds, Series 2009B.

Those bonds, with 2010 and 2011 maturities, were sold competitively to Citi, which won with a true interest cost of 1.4101%.

The Moody’s action was the second negative outlook assigned to the district in a week, after Fitch Ratings last week went negative on its AA underlying rating. Standard & Poor’s affirmed its AA rating and stable outlook.

“The negative outlook reflects weakening financial flexibility while at the same time the local and state economic outlook is also weakening and remains uncertain,” according to a Moody’s news release.

Moody’s said the district’s “substantial” tax base increased 5.4% in 2009, after average annual increases of 21% for the previous six years.

“Going forward, the 2010 tax base is expected to decline by nearly 19%,” the agency reported.

In July, the district school board backed off on plans to ask voters to extend a 1998 bond authorization, which had set a maximum property tax rate.

The district expects to ask voters for another 10-year bond authorization in November 2010, according to Moody’s.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER