Moody’s Investors Service downgraded the long-term general obligation rating for Pennsylvania’s Twin Valley School District to A2 from A1.
The move affects $72 million of outstanding rated debt secured by the district’s GO unlimited-tax pledge. The negative outlook was extended.
The downgrade to A2 reflects further deterioration of the district’s financial position and liquidity, following four years of sizable general fund declines, mostly due to historically aggressive budgeting practices and reduced economically sensitive revenues.
The rating also incorporates the district’s moderately sized tax base with healthy income and wealth levels, and above-average but manageable debt.
The negative outlook remains due to Moody’s expectation the district will remain challenged to restore structural balance over the near term, placing further pressure on its already strained fund balance and cash position.
